Massa’s strategy: negotiation with "dollar factories" and a difficult search for agreements in Congress

After the announcements of the first measures, the new Economy Minister, Serge Massagave a first taste of his strategy to deal with the economic crisiswhich will be centered on negotiate rather than confront with those sectors that in the intimacy of power usually define as “dollar mills” and at the same time search support in Congress.

After the president Alberto Fernandez sworn in at an event with a strong business and political presence and a spirit of “relaunching” a government in crisis, Massa donned the economy minister suitwith the stern gesture, the measures and disdain in front of the bombastic adjectives, but he did not take off the political leader clothing.

One of the most important signs in that sense was in his reference to those who committed “abuses” in imports and that, according to what he said, “they appropriated the dollars that SMEs often ask for machines and citizens for health equipment.”

He avoided the high-sounding criticism that is often expressed by both Fernández and Vice President Cristina Kirchner, the new minister announced the opening of a registry “so that they rectify the situation before Customs, understanding that perhaps they simply made a mistake”. After 60 days to register in that registry, those who do not rectify will be reported.

Massa proposed a sector-by-sector negotiation strategy, especially with exporters and importers

With that paragraph, Massa indicated that the political management of the Ministry of Economy will follow a Reverse logic to “hit first to deal later” popularized by the mythical former head of the UOM Lorenzo Miguel and who often applied harsh Kirchnerism: he will negotiate first and leave rigor for last.

To this is added the presentation of an agreement already closed with “the value chains of fishing, agriculture and mining” about a “scheme of export advance“so that u$s 5,000 million enter the coffers of the Central Bank and a veiled appeal to the opposition to accompany a series of specific measures that are already proposed in Congress.

Massa’s plan: what are the key sectors of your bet?

The central leg of the plan that the minister revealed is open negotiations in the economic field that enable the sectors with the greatest potential to attract dollars to be activated. For Massa, “although the difficulties are many, the global context can be transformed into an enormous opportunity for Argentina” because the world demands things of which the country has “the largest reserves.”

The new minister knows that the field is the most important of those foreign exchange mills and that is why he spoke of “proteins”, but also he set his sights on “energy, minerals such as lithium” and the so-called “knowledge economy”. That does not make Argentina “a rich country” but they can allow it to “build wealth”, according to what he stated.

The new minister tries to maintain agreements within the ruling party and seek them with the opposition in Congress

The idea of ​​opting for a negotiation and avoiding confrontation was present throughout his presentation in the microcinema of the Ministry of Economy and it was not just a demonstration of style. As iProfessional learned, it was previously discussed with both Fernández and Cristina Kirchner.

“In the Chamber of Deputies he always showed that he is an agreement builder, he always spoke to everyone without distinction and surely from the ministry it will be handled the same“, a national deputy of the ruling party close to Massa slipped before this medium.

Will it achieve political plafond for the adjustment?

The new minister understands that to achieve fiscal order that he put at the top of his presentation and strengthen exports that allow you to generate foreign exchange you need to avoid shrillness that brought the government to this critical point and, at the same time, have political muscle and room for negotiation to “bank the stoppage” in the difficult fiscal adjustment that is proposed to be carried out.

“Let’s go to fix with the resources we raise and with the financing that we can get from the private sector,” Massa launched in one of the most forceful definitions regarding the adjustment plan in public accounts.

The need to capture dollars leads him to avoid shrillness and open dialogue with key sectors

The need to secure political ceiling to face the complex balance between adjusting spending, including a significant increase in rates due to the cut in subsidies and the “cut” that marked for segmentation, solving the shortage of dollars and at the same time recomposing wages is also behind the three calls launched by the new minister.

The first one -scheduled for next week- is to companies and unions to agree on measures “that allow the revenue recovery of workers in the private sector”; the second to the field to talk about withholdings “without preconditions” and the third to Congress, to ask them for the “rapid treatment” of the tax benefits for sectors such as the automobile, nanotechnology and agribusiness. This will be the most difficult.

The complicated search for agreements in Congress

The process of search for agreements it started into the official alliance. This is how all the tribes of the Frente de Todos tried to demonstrate it, both in the session of Deputies where Massa’s resignation from the presidency of the Chamber was approved and in the Bicentennial Museum where Fernández took the oath of office as Minister of Economy. “The intern is over,” repeat different voices of that cast.

Outside, the challenge is more difficult. In Together for Change they avoid committing to any type of agreement with the ruling party and prepare to harden their position in Congresswhich poses a difficult stop for the new minister, especially in the Chamber of Deputies, where the Frente de Todos bloc does not reach its own majority on its own.

The call to Congress to advance with tax benefit laws tests the negotiation with the opposition

If Massa is doing more or less welllogically they (the opposition) they will not softenbut on the contrary”, they predict in the official bench, where they are preparing for a new stage with Cecilia Moreau at the head of the Lower House, at the request of the minister himself.

The investment promotion projects through tax incentives in sectors such as automotive and agribusiness are already in Congress but its approval was delayed by the complicated economic scenario of recent weeks and the twists and turns that occurred within the Government due to the changes in the Cabinet.

The project referred to Automotive industry it was approved last month in the lower house and awaits treatment by the Senate. It will depend on Cristina Kirchner to advance. Meanwhile, the initiative “Agribusiness Development” It began weeks ago to be discussed in the commissions of Deputies.

While such measures may have some consensus, in Together for Change were cautious after the announcements. They want to see the details and the fine print.

“Of the three key issues that the Government must correct, only the removal of subsidies was mentioned (it is necessary to see how much it implies). There were no details about the exchange rate and the interest rate. If you really do not want to use the Central Bank to finance the Treasury, a law must be voted,” warned the head of the UCR bloc, mario nigriafter the Massa conference.

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