Massa spoke out against libertarian presidential candidate Javier Milei’s dollarization plan and in favor of consensus-building within the ruling Frente de Todos coalition at a series of events today.
“How big a market will you be able to sustain with US$100 salaries and dollars at AR$1900 for your production?” Massa asked businesspeople at a launch event for credits with preferential rates for small and medium enterprises. “That’s what dollarization means.”
One of Milei’s main economic proposals is to abolish the peso altogether and for Argentina to adopt the U.S. dollar as its official currency. The idea has been criticized by economists, consulting firms, and politicians who calculated conversion rates similar to the figure Massa mentioned.
“You have a 40% US dollar prevalence in your production process, due to intermediate and consumable goods that are part of your value chain,” Massa told the businesspeople, referring to Argentine industry’s demands for US dollars from the Central Bank.
“We raised the rate for those who speculate, but we lowered it for those who produce,” he added. Massa was referring to the difference between the interest rate hike that was announced last Sunday and the preferential credit rates he was launching today. “Whenever there is an election, there is a debate between the economy of development and the economy of speculation.”
Massa also referred to Vice President Cristina Fernández de Kirchner’s comments yesterday that he “was handed a hot potato” when he took office in August.
“It was my turn to fall on a grenade or, like Cristina said yesterday, to grab a hot potato,” Massa said. “But Silvina [Batakis] was the first to fall on the grenade.”
Massa and Kirchner were referring to Martín Guzmán’s untimely resignation as Economy Minister in July. Silvina Batakis initially replaced Guzmán in the job for around a month, before being replaced by Massa. Batakis, who is now president of Banco Nación (Bank of the Nation), was present at today’s event.
Massa used the “hot potato” metaphor in another event today, during the inauguration of a road underpass in San Fernando, in Buenos Aires province. The project is called Campeones del Mundo (World Champions): artist Maxi Bagnasco painted a mural with the players of the Argentine National Team on nearby streets.
“I do not get scared when faced with a challenge. When we had to grab the hot potato, many of those who today walk around the TV channels talking vainly about candidacies, hid under the bed. We stood up, put our minds into it, and took responsibility”.
“No economic order without political order”
In the last event of the day, a meeting of the Frente Renovador (Renewal Front), his political party, Massa said that they will decide next month whether they will remain in the Frente de Todos ruling coalition.
“It’s key that, at our June 10 congress regarding the backing of candidates, we determine whether or not we participate in the Frente de Todos and how the Frente is designed.”
Moreover, Massa said that monetary emission during the pandemic, which he deemed necessary since the government had no access to the international financial market, “explains a great deal of the current inflation.”
The Minister also said that the country was “hurt by the pandemic, but also by self-inflicted mistakes such as international reserve loss and uncontrolled [monetary] emission. We need to admit our responsibility.” He quoted Kirchner by saying that debt is one of the most urgent problems Argentina faces now.
The Minister also said that infighting created “a power vacuum and uncertainty.”
“Without political order, there is no economic order.”