Crisis in Argentina intensifies as Economy Minister Martin Guzman resigns

Martin Guzman was ordered to renegotiate an IMF debt Argentina could not repay. (File)

Buenos Aires:

Argentina’s economy minister, Martin Guzman, who led debt renegotiations with the International Monetary Fund, announced his resignation in a statement shared on Twitter on Saturday.

Addressing President Alberto Fernandez, Guzman did not say why he was stepping down, but called on the center-left leader to restore internal divisions so that “the next minister does not face the same difficulties” as he does.

“It is essential that you work towards an agreement within the ruling coalition,” he added.

His resignation comes two weeks after Vice President Cristina Kirchner, a former president who is a constant critic of the government, gave a speech attacking Fernandez’s economic management.

As economy minister, 39-year-old Guzman was tasked with renegotiating a $44 billion debt with the IMF, which Argentina insisted it could not afford to repay.

The original $57 billion debt — the latest tranche that Fernandez declined after succeeding his liberal predecessor Mauricio Macri, who had applied for the loan — was the largest ever issued by the IMF.

Despite Kirchner’s opposition, Guzman managed to strike a deal and save Argentina from bankruptcy.

But Guzman often faced hostility from the Peronist Justicialist Party, the main force in the ruling coalition that counts both Fernandez and Kirchner as prominent members.

Guzman said who replaces him “needs centralized management of the necessary macroeconomic political instruments to consolidate the progress made and meet the challenges ahead.”

Agricultural powerhouse Argentina, while having the third-largest economy in Latin America, has been in an economic crisis for years, with inflation exceeding 60 percent in the past 12 months.

The country was already struggling with rising poverty and a depreciating currency before the coronavirus pandemic worsened things.

The IMF deal included provisions to contain inflation and reduce the budget deficit from three percent in 2021 to parity in 2025.

Guzman’s opponents within the ruling coalition lashed out at him for allegedly disproportionate zeal in tackling the budget deficit and his monetary policy.

He complained several times that this criticism sent worrisome signals to the already twitchy markets, making his job even more difficult.

In a recent report, the Eurasia Group’s political risk consultancy said the internal divisions will not be resolved any time soon.

“Infighting within the government will continue to worsen, further compromising the government’s ability to develop a coherent policy plan,” Eurasia said.

Although he did not reveal what his next position would be, Guzman said he will “continue to work and strive for a fairer, freer and sovereign homeland”.

Fernandez has not yet commented on the resignation of one of his closest allies.

(Except for the headline, this story has not been edited by NDTV staff and has been published from a syndicated feed.)