Fernández plays down links to orthodox economists

19th September 2019

By Ignacio Portes

Fernández plays down links to orthodox economists

Alberto Fernández has left a lot of room for imagination regarding the details of his economic plans, saying it’s hard to get into the specifics while he doesn’t know how the economy will look like when Macri’s term ends in December.

With the candidate generally seen as more “pragmatic” and “centrist” than his partner Cristina Kirchner, one of the narratives that emerged in some quarters after his win in August’s primaries was that he could turn into a new orthodox, pro-market Peronist, like Carlos Menem ended up being in the 1990s.

But Fernández’s camp has come out in the last few days to distance its candidate from such views, pouring cold water over rumors that former Menem and Macri adviser Carlos Melconian was drafting a macroeconomic plan for the presidential favorite.

</p> <p>Nicolás Trotta, who holds the unofficial position of coordinating Fernández’s “technical teams,” <a href="">said</a> Fernández has talked to Melconian but that he “doesn&#8217;t imagine him as an economy minister.” Trotta said it was early to talk about who will hold such key position, but had warmer words about more centrist policymakers.</p> <p>“(Consenso Federal Presidential candidate Roberyo Lavagna) is someone we all respect not only due to his economics but also because of his political trajectory and his views of how to lift Argentina out of this crisis. But it’s hard to talk about him right now (because he is running his own presidential campaign), we don’t want to be disrespectful,” Trotta said. He did add, however, that he could imagine Fernández calling Lavagna to join his team.</p> <h2><strong>Growing rumor</strong></h2> <p>The rumor started growing when influential La Nación columnist Carlos Pagni <a href="">reported</a> that despite his words about “protecting Argentines from austerity”, Fernández asked Melconian for a program, and that “the economist that took aim at Macri from a position that was further to the right during his whole presidential period, condemning him for being too much of a gradualist,” was unofficially working with Fernández.</p> <p>Pagni added that Fernández had told one of the <a href="">advisers</a> that are actually part of his official economic team, Guillermo Nielsen, to draft an energy program that was also very much to the right of Macri&#8217;s. “He wants a regime like the one miners currently enjoy, with fiscal stability. A Texan regime, like those who work in the sector call it.”</p> <p>Fernández responded saying he was <a href="">baffled by the rumors</a> he was reading on the press, adding that “I’ve known Melconian for a long time. Our views are generally quite different. He has a virtue which is that he is one of the guys that knows the most about the country’s fiscal matters. It’s valuable to have his vision, but I never asked him nor anyone else for an economic plan.”</p> <h2><strong>A high-profile economist</strong></h2> <p>Melconian has been a high-profile economist for long. His career in Argentina started as an official in the Central Bank during the 1980s, when the monetary authority was heavily criticized for the nationalization of private firms’ debts, including that of Macri&#8217;s late father Franco.</p> <p>His consultancy agency with partner Rodolfo Santangelo, M&amp;S, grew in notoriety during the 1990s, and by 2003 he was the main economic adviser in Menem’s ultimately failed bid to return to the presidency.</p> <p>Soon after, he began working with his friend Macri and was his senatorial candidate for Buenos Aires city in 2007. During the 2015 campaign, he was relegated to a smaller role, and ultimately only got the presidency of the state-owned Banco Nación for a few months after Macri’s victory. Melconian quit in January 2017 over his differences with the government’s economic policies, and became a very public critic of his administration, although always clarifying that he still felt loyal to the President.</p> <p>During the 2018 debt crisis, he was reportedly close to coming back to the government in a more prominent role, and helped design some of the changes to policy to navigate the crisis, including the emergency return of export duties to plug some holes in the budget. But conversations ultimately <a href="">broke down</a> and Melconian remained and outside critic who occasionally talked with Macri on the phone.</p> <h2><strong>Strange bedfellows</strong></h2> <p>His open criticism of the administration meant that Melconian became a favorite economist to quote by even left and center-left media closer to Kirchnerism during Macri’s term in office.</p> <p>Melconian’s phrase about the need to be “careful” because “<a href="">everything can fall apart</a>,” (his expression in Spanish actually used the word “shit” in it) warning about the risk of continued indebtedness, was widely circulated throughout 2017, and became iconic a year after when the feared his prophecy started to materialize.</p> <p>Even before, in late 2015, Melconian was among the critics of Macri’s proposal to end the prohibitions and limitations on <a href="">foreign currency trading</a> on the first few days of his administration. He argued that a series of underlying macro-economic and social issues should be addressed before.</p> <p>One of the most market-friendly economists in Macri’s team, Melconian was almost alone in this view among the President’s advisers, and paradoxically found more support in the camps of the two Peronist presidential candidates, Daniel Scioli and Sergio Massa, seen as generally more interventionist. He was also isolated in his opposition to the inflation-indexed UVA housing credits, loudly promoted by Macri in his first few months in charge and criticized in Peronist quarters.</p> <p>Despite this, his name still rings generally hostile to Peronist ears. Were Fernández to give Melconian a prominent role, it would likely spark internal dissidence from a camp that has shown to be surprisingly unified these last few months, putting past differences aside. Peronist sympathizers are happy to make some concessions for the sake of unity and their shared dislike of Macri, but some ideas still mean going a bit too far.</p> <p>

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Ignacio Portes

Ignacio Portes is The Essential's General Editor. Former Economy editor at the Buenos Aires Herald, he has also written for publications such as Naked Capitalism, NSFWCorp and Revista Debate.