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Argentina’s economy minister, who renegotiated IMF debt, resigns

#Argentinas #economy #minister #renegotiated #IMF #debt #resigns

Argentina’s Economy Minister Martin Guzman, who led debt renegotiations with the International Monetary Fund, announced his resignation on Saturday, sparking fresh uncertainty in Latin America’s third-largest economy.

Guzman didn’t say why he resigned in his statement to President Alberto Fernandez, but urged the center-left leader to heal internal divisions so “the next minister doesn’t suffer the same difficulties.”

“It will be important that you work towards an agreement within the governing coalition,” he added in the statement shared on Twitter.

His resignation comes two weeks after Vice President Cristina Kirchner, a former president who has consistently criticized the government, gave a speech attacking Fernandez’s economic leadership.

Political scientist Carlos Fara told AFP that Guzman’s resignation was “a checkmate for the president’s autonomy” and gave Kirchner the upper hand in their power struggle.

“The resignation will have a very negative impact on the markets. Even if the President and Vice-President agree on how to steer the economy, from now on everything will be under the pressure of Cristina Kirchner.”

As economy minister, Guzman, 39, was tasked with renegotiating a $44 billion debt with the IMF that Argentina says it cannot repay.

The original debt of $57 billion — the last tranche Fernandez turned down after succeeding his Liberal predecessor Mauricio Macri, who asked for the loan — was the largest ever issued by the IMF.

Despite opposition from Kirchner, Guzman managed to reach an agreement and saved Argentina from default.

But Guzman often faced the hostility of the Peronist Judicialist Party, the key force in the Frente de Todos (Front for All) governing coalition, which counts both Fernandez and Kirchner among high-profile members.

Kirchner’s faction has been hot on Guzman’s heels since All Front lost control of the Senate in last year’s general election.

The IMF deal was ratified by Parliament only thanks to support from the centre-right opposition, as a group of lawmakers in the ruling coalition led by the Vice President’s son Maximo Kirchner boycotted the vote.

– “Growth Crisis” –

Guzman said whoever will replace him will need “centralized management of the necessary macroeconomic policy tools to consolidate the progress made and address the challenges ahead.”

Despite being Latin America’s third-largest economy, agro-powerhouse Argentina has been mired in an economic crisis for years, with inflation exceeding 60 percent in the last 12 months.

Even before the corona pandemic, the country was struggling with rising poverty, unemployment and a depreciating currency.

Earlier this week, Fernandez admitted the country was facing a “growth crisis” due to FX shortages.

The IMF deal included provisions to curb inflation and reduce the budget deficit from 3 percent in 2021 to par by 2025.

Guzman’s detractors within the ruling coalition have attacked him for allegedly overzealousness in fighting the budget deficit and his monetary policies.

He has repeatedly complained that these criticisms send worrying signals to already nervous markets and make his job increasingly difficult.

In a recent report, Eurasia Group’s political risk consultancy said the internal divisions would not be resolved anytime soon.

“Infighting within the administration will continue to intensify and further impair the administration’s ability to develop a coherent policy plan,” Eurasia said.

Though he didn’t reveal what his next post would be, Guzman said he would “keep working and working for a more just, free and sovereign homeland.”

Fernandez has yet to comment on the resignation of Guzman, who is one of his closest allies.

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#Argentinas #economy #minister #renegotiated #IMF #debt #resigns

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