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Blood, sweat and… the private predictions of Javier Milei and Luis Caputo

“There is no money,” said Javier Milei until very recently. The phrase became established among the devotees of La Libertad Avanza, who transformed it into a motto, but also among those who abhor the administration that was born on December 10 of last year. , who use it sarcastically. “There are no pesos,” they say now in the Government. A play on words, a subtle variation of the story. In the libertarian conception, there’s no money does not mean the same as there are no weights. Under that premise, and while the Government throws a new cut every day and vacuum to remove all possible weights from the market, Javier Milei has just launched a new challenge: the remonetization of the economy. He claims that the Argentines use the dollars that are on the mattress – or, eventually, the pesos – and let anyone who doesn’t have it adjust until the storm passes.

The Government is based on two certainties. One: Argentina is the country with the largest amount of physical dollars per capita in the world, after the United States and Russia. Two: in January and February, for the first time, there were more citizens sold dollars than those who went to buy. Between December and February, they disposed of $404 million. The main reason: finance your accounts.

Social behavior has been turned upside down. The recession accelerates and the drop in consumption is notable. The middle class stops going out to eat or goes out less, restricts purchases in supermarkets, uses the car less to avoid wasting gasoline, and only adheres to automatic debit for essential services. In vulnerable sectors, daily life becomes gloomy: anyone who goes out for a coffee will see more people asking for help to eat or sleeping on the street. The fear of a deepening of the crisis also filters into the establishment, especially in companies that are already laying off or suspending staff. Its protagonists ask the same questions as the political class: the people, Does it hold up or not?

To the surprise of the traditional leadership, which is witnessing an unprecedented adjustment and making apocalyptic projections, it would seem so. At least for now. This is said by the pollsters closest to the ruling party and, at the same time, those who historically worked for Peronism. Things are bad, very bad, but they are going to be better. In the Rosada offices they remembered, days ago, that many predicted that, if Milei carried out the adjustment he promised, he would be thrown out of his chair in March. Some officials sent each other via WhatsApp the video that Enrique “Pepe” Albistur recorded in January in Cariló, eating popcorn on the beach and jokingly announcing that the Government was not coming to Easter.

Javier Milei, his sister Karina Milei and members of their delegation, including Santiago Caputo, Luis Caputo and Nicolas Posse. Photo: REUTERS

To Milei’s relief, although the house is not in order, Easter can be celebrated without blood. In popular opinion, the fault of daily sorrows remains the other’s: from Cristina and Alberto Fernández, first of all; from Mauricio Macri, if necessary, or even from those who preceded Kirchnerism. Milei He still looks like the outsider, the one who doesn’t carry marks from the past.. It is its capital, which is why the discourse against caste does not end. Those who are excited or are crying out for a more moderate Milei, away from social networks or negotiating with Congress as if they were peers, it is better to be patient. They don’t see it, they would say in the Casa Rosada.

Milei’s popularity averages 50 percent and responds, to a large extent, to this dynamic of differentiation. It is a new phenomenon. It will be seen if it is here to stay or if it becomes ephemeral as pockets become narrower and electricity bills enter homes, SMEs and large companies like lightning.

The president and his communication advisors believe that every day that passes is a day gained. They cling to the outsider’s plank to continue sinking the knife with the belief that in a short time Argentina will balance its accounts, bring inflation to very low levels and will finally face a stage towards recovery. How little time? It is the discussion that takes place in the presidential environment. No one wants to be trapped by his words. At this point, pressure in front of the microphones is imposed.

The President and his Minister of Economy, Luis Caputo, privately predict that inflation in March will be lower than expected – they even talk about a figure that could surprise, closer to 10% than the 13.2% of the previous month – and that will stretch the trend: that of January was lower than that of December, that of February was lower than that of January, and that of March was lower than that of February, despite the fact that in general it is a traumatic month. It is always appropriate to mention, even when inflation trends downward, that hammocks on exorbitant levels. Argentina continues as the country with the highest inflation on the planet, above Lebanon and Venezuela.

If official projections come true, price increases in April could be less than two digits. In the Mileist plan, in the middle of the year – or before – the exchange rate would be released. For that, according to Milei, 15 billion dollars are needed. There are those who sponsored an agreement with the IMF so that a new disbursement would take place. Today that initiative would have cooled down. “It would take us at least two months of negotiations,” they maintain. The head of the Central Bank, Santiago Bausili, and Caputo himself would prefer to wait for the first settlements from the field before making a decision.

Milei and Caputo talk on the phone several times a day. They compete to see who is tougher and, from time to time, they curse the economists who walk around the TV studios with magic formulas. According to officials, they are not recognized for their achievements out of envy or because their ego is too high. Both project the awakening of the economy for the last quarter of the year. Milei thinks it could be sooner if it weren’t for the resistance of the Red Circle, which she punishes whenever she can.

Nicolás Posse and Santiago Caputo.Nicolás Posse and Santiago Caputo.

Libertarians also seek to combat the skepticism of the opposition and the doubts of a related sector that, even if it has voted for a change, must tighten its belt week by week and succumb to the loss of salary and pensions. Elderly income is always an adjustment variable. The Government failed to explain what the new increases will be like. In any case, will be below the price increase that occurred during the 100 days of management.

The fight for funds with the provinces is another problem that is getting worse. Milei had reached an impasse with the governors, but in the last hours he returned with everything. Through a decree, he eliminated from the Budget the transfers with which he financed the retirement funds that were not transferred to the Nation. This reduction in contributions was denied yesterday by spokesperson Manuel Adorni: “Funds were not removed“, he assured and made the shipment subject to the completion of the audits in the ANSeS.

These cuts would be added to the reduction in the Teaching Fund and transportation subsidies. In Thursday’s decree, thirteen districts are affected: Córdoba, Buenos Aires, Chaco, Chubut, Corrientes, Entre Ríos, Formosa, La Pampa, Misiones, Neuquén, Santa Cruz, Santa Fe and Tierra del Fuego. Five of those are administered by governors from Together for Change and, of those five, four have just taken over.. They are supposedly those with whom La Libertad Avanza weaves some type of agreement for the new Omnibus Law and towards the May 25 Pact. They do not make it easy for the Minister of the Interior, Guillermo Francos, who has to deal with the complaints. Most of the leaders were flying with fury this Saturday.

“There was a commitment to secure the funds, but the Nation has just decided not to fulfill it. The governors are already talking among ourselves and we are going to move forward fully with judicial measures,” said one of the injured leaders. Some will wait until Thursday’s meeting, where Milei himself will receive them, to find out whether they will back down or not, as Adorni said. Others would advance on Wednesday itself, after the holidays. One of them proposes going to the Supreme Court.

In this rarefied climate, Milei plans to bring together the heads of the ten closest provinces to discuss everything from co-participation to the Omnibus Law. A conflictive issue is Income Tax. The governors are divided: those from the North propose that it be restored; Those from the South refuse because they have a greater number of workers who do not pay taxes today and who would pay again. On Monday, at the Casa Rosada, Francos and the Chief of Staff, Nicolás Posse, met with several PRO legislators. Cristian Ritondo proposed that in the Profit project gendarmes, police, doctors and teachers are exempt.

The Income Tax generates a great debate because, if it were reinstated, salaries could be affected that would not be so far from what a typical family needs to live and not fall into the poverty line. According to Indec, the basic basket amounted to $690,901.57 in March.

Javier Milei, Karina Milei, Luis Caputo, Santiago Caputo, Nicolás Posse and Gerardo Werthein when they attended the meeting at the White House with Jake Sullivan, United States National Security Advisor. Javier Milei, Karina Milei, Luis Caputo, Santiago Caputo, Nicolás Posse and Gerardo Werthein when they attended the meeting at the White House with Jake Sullivan, United States National Security Advisor.

Poverty shakes the country. On Wednesday it was learned that Alberto Fernández and Cristina left the Government in December 2023 with 41.7% poor, representing almost 20 million people. Macri had left 35.5%. The data is another example of why Milei still enjoys time and social patience.

When the figures were known, former minister Martín Guzmán blamed Sergio Massa for plunging 1.5 million people into poverty and one million into destitution in just one year. Guillermo Michel, former director of Customs and member of the Renewal Front, accused him of being a “careerist” and an “intern.” Malena Galmarini, Massa’s wife, retweeted it and it was enough for other Massites to bow down. The show was completed by Eduardo “Wado” De Pedro: with an air of smugness, he said that the previous government, of which he was a fundamental minister, lacked gasoline.

Good taste can wait. The poor, both of them, too.

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