At the same time that the Argentine Economy Minister spoke with the president about new measures to be announced, the Wimbledon final was played, without a doubt, the most traditional Grand Slam in the entire world circuit. The minister and the president were set point and match point, that is, one point away from losing the third set and the end of the match. The previous weeks had seen a sequence of fights in the ruling coalition and the departure of a couple of ministers close to the president.
The minister's first announcements give her one more move. He announced that she is going to carry out a certain fiscal adjustment, based on a rule by which each State agency will not spend resources that are not in the fund, a "single fund" system to have resources from all public agencies in a single account and an freeze to hire staff in the government and decentralized agencies. The most important thing of all is to recognize that the problem is fiscal, of course, and they do it as if they had always thought that way, when just a few days ago, the vice president pointed out exactly the opposite.
Ultimately, it is a first step. Argentina has had other experiences of governments that want to implement a "zero deficit" immediately and were overwhelmed by the storm of a crisis. They are going to take all the resources that are in the accounts of all State agencies, which is better than taking the taxpayers' money through new taxes. And it is also better to stop hiring public employees so that their number will be reduced as they retire, but it is also an unbelievable promise, already implemented and broken in the past. So let's say with the annoucements they went 40-40, deuce, and if they implemented them they could win the set.
We are being generous with the result since nothing has been said about the monetary polity by the Central Bank and only a committee was created to analyze the problem of public debt. On the other hand, the minister stated that the official exchange rate is “balanced”, but if it were so, all controls, both on exchange and imports, would not be necessary.
Very good, once you have managed to implement the announcements and obtained the third set, you have to face the other two. The first of these is to solve the main problem: public spending and its financing. This would require the economic team to work overtime. The normal hours to implement the announced policies, and additional hours to prepare a plan to reduce public spending, reform the state, renegotiate the internal and external debt. It is not about freezing the creation of public employment, their number should be reduced; and reduce or eliminate the number of social plans, and capitalize the public pension fund with state assets, and recover the debt of the Central Bank. In short, major reforms. If they did, they would have reached a tie in straight sets.
Unlike tennis, this is a set that would be played at the same time as the other, very short-term measures are sustained for a short time if there are no more weighty measures behind them.
The last set, the defining one, is played in the field of institutional reforms. The two most important are the following: Argentina does not have a currency and its government does not have the credibility to claim to generate a reliable currency. The fastest and most effective way to achieve this would be to “import” one, the dollar for example, and allow free choice of currencies. The other would be to impose some type of fiscal lock, some institutional limit to the increase in spending, to fiscal deficits, to indebtedness.
Whoever achieves that takes the cup, and goes down in Grand Slam history. The interesting thing about this reference is the emotional impact that such a sequence would generate. Saving the match point (announcing fiscal measures) is already comforting, winning the third set (implementing those measures) lifts spirits and confidence; winning the fourth (reduction of public spending, reform of the state, renegotiation of the debt) would generate enormous optimism; winning the fifth (monetary and fiscal institutional reforms) would be euphoria, and glory.
