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OPINION AND ANALYSIS | 09-07-2022 07:30

The capitulation of Martín Guzmán and the struggle of Sergio Massa

After a weekend of fury, a newly reconfigured power structure has been put in place that promises to keep us on our toes, with the vice-president continuing to gain territory.

Martín Guzmán has finally succumbed to the Kirchnerite onslaught, but also under the weight of a complex mix of market conditions that went from bad to worse very quickly, leaving Argentina once again in a moment of extreme fragility. 

The now-former economy minister went out with a bang, just like his buddy Matías Kulfas — the ex-productive development minister who was replaced by Daniel Scioli — a few weeks ago, but in Guzmán’s case he wasn’t sacked, deciding to quit instead in a direct response to Cristina Fernández de Kirchner, who was actually giving a speech at the exact moment when he tweeted his resignation letter. After a weekend of fury, a newly reconfigured power structure has been put in place that promises to keep us on our toes, with the vice-president continuing to gain territory as Alberto Fernández’s power haemorrhage refuses to end, no matter the strength of the tourniquet. All eyes were placed on the third wheel of this open relationship, Sergio Massa, who played a strong hand once again and proved to be no more than a friend without benefits, coming out empty handed for the second time in 30 days in his attempt to intervene the economic policymaking structures of the government, apparently vetoed by CFK. Now, with market turbulence running sky-high, an unlikely new and unknown protagonist has been introduced, Silvina Batakis, a debutant economy minister who few pin their hopes on to save the day. In her baptism by fire, Argentina’s country risk rate surged as the market gave her a warm welcome.

The wounds are still fresh and the barrage is ongoing, but an initial analysis suggests Mrs Fernández de Kirchner has further consolidated her strategic positioning within the ruling coalition, Frente de Todos. Having eliminated Guzmán she has finally taken the president’s strongest piece, his Queen, to use a badly constructed chess metaphor, even if the former economy minister’s true capacity and power really went no further than Knight or Bishop. A technocrat, Guzmán’s political value surged exponentially as he became the target of a concentrated attack by the most powerful sector of the Frente de Todos commanded by CFK, forcing Alberto to defend him at all costs, as if he was fighting for his own position atop the Executive. Guzmán and Alberto had endured an in crescendo of private and public attacks from Fernández de Kirchner and the broader Kirchnerite front, having both developed an incredible capacity to stoically absorb them without responding. Something finally broke, and reports indicate they sparred over the control of key strategic areas including the Central Bank and energy policy — the former run by the president’s personal friend, the latter by the Kirchnerite political organisation La Cámpora — with Guzmán asking for a power that the president was unwilling or unable to give to him given ongoing conflicts with Cristina. At the end, Guzmán’s exit further weakens Alberto’s position, but may have been inevitable amid a harrowing run on the peso and peso-denominated debt along with unrelenting inflation and an internal power struggle that had him right in the middle of it.

Batakis’ arrival in the Economy Ministry was preceded by a weekend of intense negotiations in the Olivos presidential residence, wth the president surrounded by his closest advisers and Massa, who sought to shake up the Cabinet and take a leading role in economic policymaking. Rumours and versions were constant and fed by the same protagonists to the press, and indicated the Frente Renovador leader wanted to take charge of a sort of unified control of economic policy, possibly from the post of cabinet chief, centralising the decision-making process of several ministries including Economy, Productive Development, Agriculture, and even Interior. President Fernández didn’t buy it, but also refused to call his vice-president until he had no choice, finally debating names with Cristina, some of whom had already refused the offer. What’s more important than who proposed Batakis’ name — it is said to have been either Central Bank chief Miguel Ángel Pesce or AFIP tax authority chief Mercedes Marcó del Pont — are two questions: why didn’t CFK impose a candidate of her own and why Massa’s plans continue to be vetoed? According to Roberto García in Perfil, Alberto and Cristina fear his “voracious” appetite for power. Other versions suggest it is Fernández de Kirchner who is strongly opposed.

The ongoing rumours indicate Alberto Fernández could be next in what the opposition is trying to call an “institutional coup,” but the pressing issue seems to be whether Massa’s grouping will be the one to break the coalition. For months they’ve built up the image of the current speaker of the Chamber of Deputies as a pragmatic, hard-working problem-solver who is looking to take the economic reins of the country to save the Fernández-Fernández administration, finally positioning him as the presidential candidate for 2023. Massa shares with former presidents Cristina and Mauricio Macri extremely high unfavourable public opinion figures and believes there is no way to revert them from the legislative branch. He needs to demonstrate his capacity to execute from a hands-on role. In order to do this, his aides argue, he would need to restructure the government, giving him a level of power that the other ‘shareholders’ aren’t willing to cede.

A private dinner between Alberto and his vice-president occurred once Batakis had been sworn in, something that hadn’t happened in a while. The contents of that conversation held over a meal in Olivos remains private, while The freshly minted economy minister has given a series of interviews indicating she would continue on the path laid out by her predecessor, respecting the agreement with the International Monetary Fund, yet it’s impossible to project what decision-making capacity Cristina and Alberto will grant her. Until the president and her veep agree on how they are going to run the government going forward, and Massa’s role is properly defined, we’ll continue in this tortuous limbo. Whether Batakis has the skill to fix the economy’s course is a different question, as is whether Alberto can withstand this level of public humiliation for another year and a half.

Agustino Fontevecchia

Agustino Fontevecchia


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