The war of the far-right Javier Milei against public spending has added a new ministry since Friday. The far-right president has pompously called it the “Deregulation and Transformation of the Argentine State”. He has put Federico Sturzenegger at the head, former president of the central bank during the administration of Mauricio Macri (2015-2019) and author of part of the state dismantling law that Congress approved a week ago.
Sturzenegger, 58, is part of a group of former Macri officials who believe that the liberal experiment failed because it was too lukewarm in its modernizing efforts. She left the central bank in protest in June 2018, after Macri’s economy ministry raised the inflation rate and cut taxes, affecting fiscal goals. During the 2019 presidential election campaign, she joined the team of Macri’s candidate, Patricia Bullrich. She prepared an extensive work for her that proposed the elimination of hundreds of regulations in different sectors of the economy, such as rentals and private medicine. Bullrich lost the election and joined the Cabinet as Minister of Security. Sturzenegger then made her deregulatory proposals available to the new far-right president, which ended up being part of the Ley Bases, the law to dismantle the state that Congress approved last week.
Milei considers Sturzenegger a “colossus” of the economy. It was only a matter of time before he went from informal advisor to senior official. The way had to be found. The president had long been considering creating a ministry that would work on reducing the State, that “criminal” structure that the ultra-president promised to destroy from within, as if it were “a mole”. The main obstacle to the arrival of the new deregulatory minister was within the Cabinet: Sturzenegger has a terrible relationship with the Minister of Economy, Luis Caputo, his successor at Macri’s central bank after his resignation in 2018.
The new ministry coincides with the official launch of the “second phase” of the war that Milei is waging against inflation and the deficit. With the elimination of the fiscal deficit, via the liquidation of salaries and pensions, and inflation controlled at around 5% per month, the Casa Rosada now has the challenge of lifting the exchange restrictions that prevent the free trade of foreign currency. The “exchange rate restriction”, as it is called, is the condition that investors put in place to leave their money in Argentina. Minister Caputo announced last week that he will leave the end of the restriction for a “third phase”. In the meantime, he will negotiate with the International Monetary Fund (IMF) a new program that will allow the arrival of at least 15 billion dollars. That is the figure that Caputo calculates he needs so that the central bank can resist an eventual speculative attack against the peso once the exchange market is freed.
Sturzenegger now has a fundamental role in the start of this second phase of dismantling the State and reducing expenses. Milei anticipated that the first measure of his new minister will be to send to Congress the so-called “Law of Hojarascas”, which will eliminate or modify with a stroke of the pen “a set of regulations that hinder the functioning of the economic system”. Then he will make use of the rest of his powers, such as the dismissal of public employees, the elimination of bureaucracy and the withdrawal of the State from productive activities that Milei considers to be the responsibility of the private sector. On the list is public works, today completely paralyzed.
The new minister enthusiastically embraced from the first day the war against the State and the political, business and union “caste” promoted by Milei. After the first six months of management, last June, Sturzenegger celebrated with an extensive message on his social networks that the ultra president had done “more than what is seen”. “Public spending was an alibi to sustain a series of political expenses. ‘I’m going to use your money to help you’ they told you. But the reality was that they used your money to help themselves. That is the biggest scam of the progressive discourse. That is why the adjustment [ejecutado por Milei] It is popular. Because it was understood that it is about giving money back to the people. The ‘no hay dinero’ is: there is no money for politics to continue exploiting you,” he wrote. Gone are the days when he was considered a moderate Macrista.
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