Last week, Economy Minister Luis Caputo declared that Argentina had achieved a staff-level agreement with the International Monetary Fund.
He emphasized that President Javier Milei’s aggressive economic policies would continue, stating that if the president’s proposed ‘Omnibus Law’ was rejected, more challenging economic measures would be implemented in the near future.
Despite delivering this warning, Caputo appeared unfazed and showed no signs of worry.
The future of La Libertad Avazna is already being planned, with measures in place to reduce the number of government employees and provide financial support for public transportation and energy.
The individual overseeing the Treasury has successfully developed a strong rapport with the leader of the country in a surprisingly brief period, engaging in daily conversations. Their compatibility has grown to an extent that, prior to any interviews or public appearances by the president, they collaborate and reach a consensus on the topics to be addressed.
Hence, the president completely disregarded the minister’s comments made on Wednesday evening regarding potential future cuts in spending if the bill currently being discussed in Congress fails to be implemented. These comments were made during a press conference where the minister also discussed the agreement made with the multilateral lender.
In addition, according to Perfil’s investigation, Milei agrees with Caputo’s belief that all economic actions thus far have been executed without requiring a drastic fiscal change. They both believe that there is ample room to further reduce government funding, with various areas to focus on.
The primary focus, which the government is already deeply preoccupied with, relates to the state personnel. There will be a thorough examination of the overtime for state employees, which involved input from Presidential Spokesman Manuel Adorni.
Simultaneously, efforts will be made to implement salary freezes, despite the constant opposition from trade unions (there will be another protest tomorrow at the CCK Kirchner Culture Centre).
Additionally, there are 70,000 employment agreements in the public administration that have been renewed for only 90 days, the majority of which will not be extended upon expiration.
It is expected that many individuals currently employed by ministries and public institutions will leave their positions and transition directly to the private sector.
According to a contact at the ATE state workers’ union, which is known for its strong opposition to the libertarian administration, the government is intentionally setting up various obstacles to discourage people from pursuing public employment in the future.
There is a high possibility that the Communication Secretariat, currently under the leadership of journalist Eduardo Serenellini and employing 500 people, will undergo pruning. According to LLA sources, an audit has suggested that the Secretariat can continue functioning with only 50 employees.
This information has been shared with President Milei, Cabinet Chief Nicolás Posse, and Armando Guibert, who is responsible for the State Transformation Secretariat and the civil service.
Next month, the Sindicatura General de la Nación, led by Miguel Blanco, will provide further details on the staffing levels in each government sector.
As per Decree 126/2023 that was published on January 3, Milei granted the officials of this organization a 30-day deadline to compile a report on crucial areas and concerns pertaining to the performance of every agency.
Furthermore, it is stated in the official statement that the new government intends to appropriately prioritize the decisions and actions of the authorities.
They also aim to carefully plan and implement the required changes and reforms. The statement emphasizes the importance of obtaining accurate and sufficient information regarding the administrative, financial, and asset-related circumstances, as well as all ongoing activities within each entity of the national public sector.
The government is focusing on subsidies for energy and public transport as well. Caputo cautioned that if state support for bus companies in the Buenos Aires Metropolitan Area is suddenly removed, people may experience more suffering as fares would significantly and immediately increase.
At the moment, Milei’s government is employing a strategy of gradualism and has chosen to slowly decrease the amount of money allocated for public transportation, leading to a monthly increment in fares.
A comparable situation is occurring regarding gas subsidies. The Energy Secretary, Eduardo Rodríguez Chirillo, discussed a new approach to funding that involves transferring and readjusting state funds gradually and progressively.
According to the official’s statement during a public hearing, this will lead to a fare increase of approximately 33 percent over the next three months. However, there is a possibility that the scheme could abruptly and significantly change, resulting in a steep tariff hike for tens of thousands of users.
There is another fact that cannot be ignored when it comes to understanding the actions of the chainsaw: they are all supported by the IMF. The relationship between Milei and the IMF is very positive, and he is aware that any plan involving reductions will receive strong support from the international financial institution.
