Argentina govt crises build as economy minister Guzman resigns

Argentina's Economy Minister Martin Guzman resigned yesterday, a blow to a government beset by mounting economic crises.

Guzman (above), who led Argentina's debt restructuring deal with the International Monetary Fund and creditors, posted a letter to his Twitter account announcing his decision.

"I write to you to present my resignation as economy minister," Guzman said in a letter addressed to President Alberto Fernandez. He had been a minister since late 2019.

The government is facing its lowest approval rating since taking office in 2019. Inflation is running above 60 percent and the peso currency is under growing pressure. Sovereign bonds have plummeted.

The resignation leaves the ministry leaderless just as Guzman was expected to travel to Europe to negotiate a US$2 billion debt deal with the Paris Club of sovereign lenders.

Investors are sceptical about the economy and infighting in the governing coalition between moderates like Guzman and a more militant wing, including vice-president Cristina Fernandez de Kirchner.

Mariel Fornoni, director of the Management and Fit consultancy, said the resignation of a key ally was a reflection of President Fernandez’s loss of power since a painful midterm election defeat last year.

"It is the chronicle of a death foretold. Ever since the loss in last year's legislative election,” she said, adding that a militant wing around the powerful vice-president had been pushing to oust Guzman.

"(The president) has lost another piece of his board, perhaps the most important, and is increasingly alone," Fornoni said.

Guzman tellingly posted his resignation letter while Fernandez de Kirchner was giving a speech commemorating iconic former Argentine president Juan Domingo Peron.

Guzman said, "there should be a political agreement within the governing coalition" to choose his successor.

The president’s office said that it did not yet know when a replacement for Guzman would be announced.

A government source who asked to remain anonymous told Reuters that Guzman's exit was due to what he felt was a lack of political support for his agenda.

Miguel Kiguel, former secretary of finance in Argentina, told Reuters that whoever takes over will have a tough time, noting that inflation could hit 80 percent this year and there is a gap of nearly 100 percent between official and parallel currency exchange rates.

"We don't know who's coming, but this will be a very hot potato," Kiguel said. "Whoever comes is going to have a very complicated time."

- Reuters