Buenos Aires city mayor and Juntos por el Cambio (JxC) presidential candidate Horacio Rodríguez Larreta distanced himself from fellow JxC rival Patricia Bullrich after she said that, if elected president, she would aim to get another loan from the International Monetary Fund (IMF) to “shield” the economy with dollars and lift currency controls.

Larreta said that Bullrich’s proposal is similar to what former president Fernando De La Rúa did at the beginning of 2000 by signing a US$7.4 billion loan with the IMF. The decision didn’t stop the capital flight or contain the delicate economic situation that ultimately exploded in a harsh social crisis in December 2001.

De la Rúa called the move “blindaje” — shielding, in English. It’s the same word Bullrich used, who was Labor Minister of De la Rúa’s administration.

“The shielding program was something De la Rúa did, and we’re not going to repeat that,” Larreta said. “Let’s take a look at the history of Argentina, how did that government end after the loan was signed? Is that how we are going to start a government term?,” the BA city mayor told CNN Radio.

On December 20, 2001, De La Rúa resigned and left Casa Rosada on a helicopter in the middle of ongoing riots in downtown Buenos Aires that had started the day before, when the president announced a state of siege. Four people were allegedly killed by the police during the harsh clampdown.

In an interview with La Nación+ on Monday, Bullrich gave the outline of her plan. “Under a new program — an agreement — with the IMF that would shield us with US dollars, we will end the [currency control currently in force known as cepo] as soon as possible,” she said

Earlier that day, at an event organized by rural producers, she announced that she would “shield” the economy with an unspecified number of US dollars she “would negotiate internationally,” but wouldn’t give details on how she plans to get them yet.

In a new chapter of JxC infighting, Larreta said another IMF loan is not the solution to the country’s economic problems.

“No serious economist will tell you that you can eliminate the cepo on your first day [in government], because there are no dollar reserves in the Central Bank,” Larreta said.

Because of currency controls, in Argentina people can only exchange pesos for up to  US$200 per day, and those who receive government welfare or service subsidies are not allowed to.

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According to Larreta, eliminating those currency controls can only be possible “if Central Bank reserves are restored and the Argentine economy regains confidence.”

However, the BA city mayor promised he would progressively lift the cepo as soon as possible if elected president.

“Our proposals are doing our homework: lowering the deficit, accumulating reserves, and finally lifting the cepo. That can be done once we’ve done everything else.”

In Larreta’s eyes, Argentina should have longer payment terms and a lower interest rate. “If Argentina grows, the IMF won’t be a problem. No one is thinking of not paying our obligations, but we need to negotiate firmly,” he added.

Milei joins the debate

La Libertad Avanza’s (LLA) presidential candidate, libertarian economist Javier Milei, also criticized Bullrich’s proposal, saying it was worse than De La Rúa’s “shielding” policy.

Milei, who is viewed as being in competition with Bullrich for the same voter demographic with their confrontational and drastic proposals, seemed to abandon their unspoken agreement of not criticizing each other in public.

“Bullrich’s plan is even worse than Fernando De La Rúa’s blindaje, because it means going into debt to support a currency crisis without solving the LELIQ problem, and with a dubious solution to fiscal imbalance,” Milei said while campaigning in Rosario, the biggest city in Santa Fe province. The LELIQs are a peso title issued by the Central Bank. They basically are short term loans that the Central Bank gets from banks, as a way to manage liquidity absorption.

According to Milei, what Bullrich proposes “would end up enlarging the debt and wouldn’t give a definitive solution to monetary problems, because politicians would still have control over money printing.”