The IMF mantra of ‘Austerity’ has never worked ! Macri will go through the motions:
“It has become clear that Macri wants to focus the fiscal cuts on spending, without backtracking on commitments to lower taxes, especially on agricultural exports,” said Daniel Kerner, an analyst at Eurasia Group, a risk consultancy. Measures include caps on public sector wages and a freeze on hiring new employees, a further reduction in energy subsidies, and cuts to less urgent infrastructure projects.
The ‘Party Line’ on ‘Austerity’ is to cut spending and lower taxes: its called Neo-Liberalism not ‘Liberalization’! In sum, it is to make war against what is left of the Welfare State and replace it with ‘Market Discipline’. You don’t need to be Keynes to see the hackneyed, indeed, dull witted repetitive solution that the Neo-Liberals offer.
Look to the faltering Jupertarian Program of Macron: he whines about the public funds wasted on the undeserving, as reported in the pages of The Financial Times , via his staff. While he spends as lavishly like Louis XIV!
Cutting taxes is a way of ‘priming the pump’ or so the propaganda dictates, although the record of the failure of this ‘methodology’ was manifested in Argentina’s original default. Macri is the opening of Act Two of Argentina’s new default, that will be repeated in Act Three. Some how the appearance of a Eurasia Group technocrat does not surprise, as Ian Bremmer is Corporatist, held in high regard by the organs of its dissemination. Mr. Kerner continues his explanation/defense of Macri’s balancing act:
“The belief is that any break in contracts or agreements would further sour investor sentiment and hurt any chance of better [economic] conditions next year,” Mr Kerner added, pointing to concerns in the energy sector, where Mr Macri has upset executives by rowing back some of his liberalisation agenda.
One ruddy-cheeked farmer answers any question the reader might have regarding Macri’s program. Add this to the rolling strikes by truck-drivers- it looks like Act Three is just about to begin, the house lights flicker, to call the audience back to their seats.
As for the explosive issue of export taxes, memories of the disruptive conflicts a decade ago — and the farming lobby’s ultimate victory — remain vivid. “Nobody else has to pay export taxes, so why should we?” asked one ruddy-cheeked farmer at the fair, losing his composure at the mere idea. “After what happened in 2008, politicians know what happens when farmers are unhappy.”
Thank you for your comment. ‘… and your solution is what?’ I did not saddle,once again, the Argentine people/nation with another installment of IMF debt, linked to the near impossible markers of their Austerity Regime, set by the IMF. After the ‘Austerity Lite’ of Macri’s , less than a year and some months elapsed, before the near free-fall of the peso! A new de Kirchner already exists, and will be trust or choose to taker take her or his place in the new unfolding of this melodrama.
The failure of Macri’s weak interventions means that the ‘stronger medicine’ of the IMF are demanded! Market Discipline has never worked: look to the 2008 Depression and our dismal world, after the crime of the Neo-Liberal Swindle’s immiseration of both the Working Class and the Middle Class. Read Wendy Brown’s ‘Undoing the Demos : Neo-Liberalism’s Stealth Revolution’ for a history of this economic/political nihilism! this in answer to your :
‘Ranting against Neo-Liberalism is all good and well (and not terribly original by the way) without suggesting anything to get Argentina live within its means is not helpful.’ I supply to the Financial Times readers an alternative view of its Neo-Liberal propaganda.
Vulture Capitalist Paul Singer purchased the Argentine Debt for $117 million and made $2 billion for himself and his confederates:
Headline: How one hedge fund made $2 billion from Argentina’s economic collapse
NEW YORK –When Paul Singer’s Elliott Capital launched a 15-year battle to wrestle billions out of Argentina for lapsed debt payments, it wasn’t the first time the hedge fund had taken on a foreign government.
But few engagements have turned into such a high-profile international scuffle.
In order to collect the decade-old debt, Singer’s fund tried to claim money deposited by the country’s central bank in the U.S. and Europe. And it sought to seize two satellite launch contracts between Argentina and SpaceX.
Elliott Capital’s arguably most audacious scheme came in 2012, when the Argentine navy’s proud three-masted tall ship pulled into the port of Tema in Ghana with more than 250 crew members on board, recent graduates of the Escuela Naval de Argentina participating in an annual training session. The Libertad was worth a fraction of what the hedge fund claimed that it was owed, but the 100-meter ship quickly became a chip in an international fight over billions in old debt.
Elliott Capital persuaded a Ghanaian court to seize the vessel so it could collect on its debt. Argentinian officials would lash out at Elliott as “unscrupulous financiers” and after more than two months the ship was released.
Four years later, though, Elliott Capital and several other hedge funds and creditors are about to get their satisfaction.
The Argentine government agreed to a settlement that would allow Singer’s fund to walk away with $2.4 billion for bonds that the government had failed to pay on, according to court documents. The bonds had a face value of $617 million, but had been purchased for about $117 million, according to an analysis of court records by Martin Guzman, a postdoctoral research fellow at Columbia University Graduate School of Business. Argentina’s Senate is scheduled to sign off on the deal this week.