Argentine Minister of Economy Martin Guzman, who led debt renegotiations with the IMF, announced his resignation on Saturday, sparking fresh uncertainty in Latin America’s third-largest economy.
Guzman did not say why he resigned in an open statement addressed to Argentine President Alberto Fernandez, but called on the center-left leader to mend internal divisions so that “the next minister does not suffer” the same difficulties he had.
“It will be essential that you work on an agreement within the ruling coalition,” he added to the statement shared on Twitter.
Photo: Reuters
His resignation comes two weeks after Argentine Vice President Cristina Fernandez de Kirchner, a former president who has been a constant critic of the government, gave a speech attacking Fernandez’s economic management.
Political analyst Carlos Fara said that Guzman’s resignation was “a checkmate for the president’s autonomy” and had given Fernandez de Kirchner the upper hand in their power struggle.
“The resignation will have a very bad effect in the markets. Even if the president and vice president reach a consensus on managing the economy, from now on everything will be conditioned by Cristina Kirchner’s pressure,” Fara said.
As economy minister, the 39-year-old Guzman was tasked with renegotiating a US$44 billion debt with the IMF that Argentina insisted it could not afford to repay.
The original debt of US$57 billion — the last tranche of which Fernandez declined after succeeding his liberal predecessor Mauricio Macri, who had solicited the loan — was the largest ever issued by the IMF.
Despite resistance from Fernandez de Kirchner, Guzman managed to conclude a deal and save Argentina from defaulting.
However, Guzman was often faced with hostility from the Peronist Justicialist Party, the major force in the Frente de Todos (Everyone’s Front) ruling coalition that counts both Fernandez and Fernandez de Kirchner as high-profile members.
Fernandez de Kirchner’s faction has gone after Guzman ever since Everyone’s Front lost control of the senate during last year’s midterm legislative elections.
The IMF deal was only ratified by parliament with support from the center-right opposition, as a group of legislators in the ruling coalition led by the vice president’s son Maximo Kirchner boycotted the vote.
Guzman said that whoever replaces him will need “centralized management of the necessary macroeconomic political instruments to consolidate the progress made and face the challenges ahead.”
While agricultural powerhouse Argentina has the third largest economy in Latin America, it has been in an economic crisis for years, with inflation of more than 60 percent in the past year.
The country was already struggling with rising poverty, unemployment and a depreciating currency before the COVID-19 pandemic exacerbated matters.
Fernandez last week said the country was facing “a growth crisis” due to a shortage of foreign exchange.
The IMF deal included provisions to contain inflation and reduce the budget deficit from three percent last year to parity by 2025.
Guzman’s detractors within the ruling coalition criticized him over his monetary policy and his perceived excessive zeal in tackling the budget deficit.
He complained several times that these criticisms sent worrying signs to already jittery markets, making his job more difficult.
In a recent report, the Eurasia Group political risk consultancy said the internal divisions would not be resolved any time soon.
“Infighting within the administration will continue to worsen, further hurting the administration’s ability to develop a coherent policy plan,” Eurasia said.
Although he did not reveal what his next post would be, Guzman said he would “continue working and striving for a fairer, freer and sovereign homeland.”
Fernandez has yet to comment on the resignation of Guzman, who is one of his closest allies.
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