The transition to the Argentine presidency of Javier Milei, since his victory in the second round on November 19, has been marked by a lack of coordination and evident improvisation that have led the far-right to prematurely archive some of his campaign flags.
With just over a week to go until December 10, the day the mandate begins, the dance of names to join the cabinet does not stop. Half a dozen people who had been officially appointed to key positions were no longer appointed in a matter of hours. Distances have come to the surface early, such as with the denialist vice president Victoria Villarruel, which reinforces Milei’s self-absorption about the basic nucleus in which her sister, the former tarot reader Karina Milei, reigns.
Ideas of all kinds are thrown into the air, some of which imply structural changes that would mean a solid legislative force that La Libertad Avanza, Milei’s party, lacks. The outlines, such as an “omnibus” law for a total restructuring of the State and the repeal of hundreds of regulations that would be presented on December 11, would require complex legal engineering; others would only be possible with a change to the Constitution. Milei did not even name the person in charge of the legal and technical secretariat of the Presidency, who should be of the utmost confidence because he writes the decrees, regulations, bills and laws that the head of state signs.
Without dollarization, but with “caste”
Milei built his presidential project on two pillars: dollarization, as a recipe to leave inflation behind, and the fight against “the caste”, in reference to traditional political, union and social leaders. Both pillars seem to have been forgotten.
The elimination of the peso as the national currency and its replacement by the dollar, a controversial extreme that alarms the business and financial world, was “non-negotiable,” Milei said on numerous occasions. He would immediately begin lifting restrictions on access to the official exchange rate, even at the cost of an uncontrolled maxidevaluation. “The higher the dollar is, the easier it is to dollarize,” the ultra even said last October, which only caused prices to skyrocket.
The dollarization project was postponed until further notice. Four days after the second round, Milei fired the Alma mater of that adventure, Emilio Ocampo. This ultraliberal economist, author of the book Dollarization: a solution for Argentinahad been announced as the last president of the Central Bank, because he would later close it or, in Milei’s terms, “set it on fire.”
Ocampo’s departure coincided with the arrival at the Hotel Libertador – where Milei is staying – of Luis “Toto” Caputo, the “Messi of finance”, a title granted to him by the Government of Mauricio Macri years ago. This graduate of the University of Buenos Aires and expert in trading financier will, almost certainly, be the Minister of the Economy. The head of the Central Bank, the position that Ocampo left vacant, had a replacement who resigned on Twitter 48 hours after the rumor arose from the ranks of La Libertad Avanza. For now, the ‘arsonist’ of the Central Bank is a mystery.
Caputo was Secretary and Minister of Finance of the Macri Government from December 2015 to mid-2018. As such, he was the architect of the debt with foreign bondholders and, finally, with the IMF. It was a roller coaster of taking on foreign debt of which there was no precedent in Argentine history. The loan for 44.5 billion dollars is to date the largest granted by the multilateral organization to a country and a burden that the Argentine economy cannot shake off. To a certain extent, the inability of Alberto Fernández’s government to turn the page on Macri’s debt explains the defeat of Peronism in the presidential elections that Milei won.
Before his time in public service, Caputo had worked at banks JP Morgan and Deutsche Bank. He also created his own investment fund, Axis. The global leak of the Paradise Papers brought to the surface his shareholding in the company offshore Noctua, based in Miami and Delaware.
Caputo was one of many who made the leap from the private world to a state seat during the conservative Macri period. That step earned him several judicial fronts that are still open, by society offshore undeclared, investments by the state pension fund for the benefit of his own company Axis and the IMF loan reported as fraudulent. Like all cases involving Macri or his former officials, the files are paralyzed in federal courts.
Since 2019, many of the members of Macri’s Government returned to their businesses and Caputo was one of them. His last name, however, did not leave the headlines, both because of the omnipresent weight of the debt and because of the fact that his sister Rossana Caputo emerged as an alleged financier of one of the young far-rightists who broke out in recent years with threats to assassinate Kirchnerists and violent demonstrations. One of them twice pulled the trigger of a gun centimeters from Cristina Fernández de Kirchner’s face on September 30, 2022.
On a programmatic level, the arrival of Caputo means that Milei will opt for taking on foreign debt, a hypothesis that the president-elect had ruled out when he was a candidate and had led him to question the economist with his usual expletives. Now, everything is roses for his alleged minister.
The excuse for a new debt adventure in dollars with jurisdiction in New York is to dismantle the mountain of settlement letters (LELIQ) of the Central Bank, instruments in pesos that support the bank deposits of Argentine companies and savers. As there are excess pesos and they accumulate interest, the Central Bank issues these bills – non-transferable debt instruments – at a higher rate than that received by depositors, in order to support the banks. These instruments today total 23.8 trillion pesos (65 billion dollars).
Economists from various backgrounds, including ultra-liberals, such as Milei’s also displaced chief advisor, Carlos Rodríguez, describe as unnecessary and even fraudulent the taking on debt in dollars to cover LELIQ pesos that would liquefy on their own if a plan is implemented. of adjustment and stabilization that manages to contain inflation. However, opinions on this matter are varied.
Several of his colleagues disparage the future minister for his alleged low flight because, as they say, he is barely a trader of finances, without the baggage to face a serious macroeconomic program. To reinforce this aspect, Milei appointed Joaquín Cottani, a more accomplished economist who was an official for the conservative Peronist Carlos Menem in the 1990s, as second in Economy.
Milei’s ‘dream team’
Caputo refers to Macri. The alliance of this former president with Milei is one of the factors that dragged the far-right into a swamp in the appointments.
Macri demands seats for his own, but his coalition, Together for Change, was left in an assembly state after its presidential candidate, Patricia Bullrich, came third in the first round on October 22. Bullrich, radicalized to the right, led with Macri the landing in Milei’s ranks, a maneuver that contributed to the extremist’s victory in the second round. But that harmony was also broken and the former president and his former minister are now facing each other. Bullrich won a prize for repeating as Minister of Security – she already was with Macri –, a position in which she will be able to support police and gendarmes who commit “trigger-happy” executions, as she has done previously – as minister and presidential candidate – .
The president-elect relies on former executives and contractors from the company where he worked for 13 years, Corporación América, with interests in airports, oil and construction. The few firm appointments to his positions come from that world, such as the future chief of staff, Nicolás Pose; the Minister of the Interior, Guillermo Francos; that of Infrastructure, Guillermo Ferraro; and that of Justice, Mariano Cuneo Libarona.
The self-proclaimed “father” of four dogs and the spirit of a fifth also leaned on businessmen Werthein (telecommunications, agriculture, media), one of whom he appointed as ambassador to the United States after having traveled on his personal plane to New York and Washington earlier this week.
Another of the collateral effects of the bidding in Together for Change and the lack of personnel in Milei’s ranks is that the alternate presidency of the Senate and the leadership of the Chamber of Deputies are vacant, which follow in the institutional succession to the president and the vice president. The Peronist blocs would have the power to appoint two of their own, because they are the first minority in both chambers, but they will grant the appointment to La Libertad Avanza, which only has seven senators out of 72 and 38 deputies out of 257.
The president-elect explores variants among right-wing Peronists, Macri has his favorites, the factions of Together for Change maneuver on their side and the new legislators of La Libertad Avanza claim not to be ignored. The strongest version indicates that the person chosen for Deputies would be Martín Menem, nephew of the former right-wing president. Peronism, still in a state of stupor from the defeat, observes.
He dream team de Milei adds names that raise concern in human rights organizations. María Eleonora Urrutia was appointed for the transition in Education issues. She is married to Hernán Büchi, Minister of Economy of Chile under the dictatorship of Augusto Pinochet and candidate for president in that last year. She is an admirer of both Pinochet and Argentine dictator Jorge Rafael Videla.
For the prosecution of the Treasury (head of state lawyers), the ultra president appealed to Rodolfo Barra. He is a former Minister of Justice and former judge of the Supreme Court appointed by Menem. Barra has to his credit the fact of having been a Nazi in his youth, but later he regretted it.
Milei takes reality baths and executes them in her own way. For now, there is an idyll with the television channels of La Nación, América 24 and TN (from Grupo Clarín), which also determines the end of his short-lived offensive against the traditional media, which he accused of “enveloping” (with bribes). at some tense moment in the campaign.
Some lower position lockers were given by Milei to influencers, financial experts and journalists who accompanied him in his anti-system stage. The rest, what was important, was left to “the caste.”