It has been proved that Argentina, and particularly Peronism, never ceases to amaze. Cristina Kirchner led the polls until one week ago, when she took the entire political system by surprise by presenting herself as candidate for the Vice Presidency and by nominating her former Chief of Staff, pragmatic Alberto Fernández.
Fernández's was formed in the right wing of Peronism and was an ally to former minister Domingo Cavallo, also known as a pragmatic.
The future president of Argentina will inherit a country whose biggest problem is one of the highest inflations in the region (above 40% per year), a high external debt, and no access to the markets. The situation forced President Macri to bind himself to a loan from the IMF.
It is noteworthy that Cristina's candidate moves away from the left-leaning tendency that she unveiled during her second term in office. Alberto Fernández has begun a series of secret meetings with notorious ultra liberal economists, closer to Macri's right-leaning points of view.
Among his advisors, Guillermo Nielsen, former Secretary of Finance, is a highlight. During Néstor Kirchner's government, he became a central figure to face a similar debt crisis. "We were in that labyrinth in 2003, and we know how to get out of there", Alberto Fernández said in Merlo this Saturday, during his first act with Cristina as candidates.
Nielsen is seen by the markets as the "least worse" from Fernández's pool of advisors, although many still hold a grudge against him for the strong relief imposed during the renegotiation of the debt.
However, Wall Street recognizes that this move is the most reasonable one to be expected from Kirchnerism, especially when compared to the heterodox economists that Fernández gathered from the Callao Group before being nominated.
Interested in adding volume to the "liberal" wing of a prospective Peronist government, Nielsen probed Diego Giacomini and Javier Milei, two examples of this ideology. LPO was able to confirm contacts by sources aware of these conversations.
Former Secretary of Finance Nielsen asked them if they would be willing to collaborate with a government led by Alberto Fernández. It is a bold move, since Giacomini and Milei were harsh critics of the Kirchnerist economic model, even during its early stages when Nielsen was Secretary.
Up until now, there have only been phone calls. Some believe that Nielsen, Giacomini and Milei might get together in the next few days to talk further.
Equally important is the fact that Giacomini is one of the most respected economists by Nielsen, whereas Milei is in very good terms with Alberto Fernández. The later has become a media star with his anger directed towards political spendings and an outrageous behavior, including insults and a fondness for cosplay.
Both Giacomini and Milei are declared fans of the Friedrich Hayek's Austrian School of Economics, as well as several other extreme libertarians, such as Ayn Rand, author of Atlas Shrugged. Milei, in fact, considers himself a "liberal anarchist", because of his extreme positions that stop short from proposing the disappearance of the State.
In Alberto Fernández's inner circle, it is believed that Nielsen can hold a key position managing the external debt, and that he can place Giacomini in the Central Bank, with Milei in some position linked to economic growth. Mariano Fernández -another professional in the group- could be focused in micro-economics.
It was no easy task to reach an agreement because Giacomini-Milei (along with Mariano Fernández) let on that the only possible way in which they could join a government with Alberto is if their plans are respected.
These plans include, among other things, that the Central Bank be dismantled by stages, as well as the Leliqs scheme, and to face a profound monetary reform in order to eliminate inflation.
These ideas clash, partly, with the ones from the Callao Group, and with those from other neo-Peronist economists that approached Alberto Fernández, such as Matías Kulfas, Augusto Costa, Cecilia Todesca, Paula Español, Agustín D'Attelis and Emmanuel Álvarez Agis.
All these cast of characters pose an important question: What role will Axel Kicillof play? He was the leader of several of the above-mentioned economists and he was Cristina Kirchner's chief economist. He designed her entire economy plan during her last term.
Alberto Fernández usually acknowledges Kicillof's value. He is currently in the race for Governor of Buenos Aires. However, in recent declarations, Fernández has been extremely critic of his role as Secretary of Economy.
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