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Marco del Pont will preside over the Central Bank
El Cronista
February 04, 2010

The President chose her with the idea that the bank act in sync with the government; they insist on freeing up the use of reserves

Mariano Obarrio
LA NACION

President Cristina Kirchner yesterday formalized the removal of Martin Redrado from the position of President of the Central Bank and designated as his replacement the developmental economist Mercedes Marc del Pont. She also confirmed that the Congress will debate a bill to reform the Charter of the BCRA which could set off a new debate about the autonomy that the monetary authority will have.

Marc del Pont therefore will leave the presidency of Banco Nacion. Cristina Kirchner announced that she will be replaced by the current director general of that entity, Juan Carlos Fabrega, a close confidante to ex-president Nestor Kirchner.

The Kirchnerist official will take charge today of the running of the BCRA "on commission", until she is confirmed by the Senate under law. She could start working immediately. In fact, she already met yesterday with the vice president of the Central Bank, Miguel Pesce, and today will chair the first meeting of the Board.

In a press conference held yesterday at the Casa Rosada, the President sought to retake the initiative after the exhausting crisis over the use of US$6.569 billion in BCRA reserves to create the Bicentennial Fund and guarantee payment of debt in 2010. Also, she announced the creation of an Economic Council, made up of Economy Minister Amado Boudou and the future leader of the Central Bank, to coordinate policies.

Cristina Kirchner had intended to remove Redrado by decree for opposing the use of reserves, but the judiciary blocked it. The new decree removing Redrado, who resigned on Friday, was based on the special commission of Congress "counseling on the removal for incurring bad conduct and non-compliance of duties." However, Vice President Julio Cobos had recommended the removal for other reasons.

The new decree established also that "the removal is confirmed by the decree (DNU) 18/10 of January 7th," with which she had tried to remove Redrado without the support of Congress, despite what is fixed in the BCRA Charter.

Without explicitly admitting it, Cristina Kirchner left DNU 18/10 without effect because that rule had suspended the attributions of Congress in the process of removing Redrado as the law fixes. In yesterday's decree the President admits that now she is in compliance with Article 9 of the Charter, which DNU 18/10 had been weakened by.

With the designation of Marc del Pont, the government changes its policy about the Central Bank. The economist in the past wrote a bill in Congress for the bank to have a cooperative function with the Executive Branch to apply its monetary policy and its resources to the sustainability of productive activity and that it would be consistent with the official economic ideas.

Change of plans

In the days of the crisis, the government had announced that Mario Blejer would succeed Redrado, but finally the economist, more orthodox than Marc , turned the offer down.

All signs had pointed to Pesce replacing Redrado. The nomination of Marc del Pnt only came out minutes before the announcement. The President had made the offer to the official the night before last at Olivos.

As LA NACION reported on Monday, the government could push a similar bill to Marc del Pont's who is a firm defender of the Bicentennial Fund to reform the charter of the BCRA. For some economists, that could limit the autonomy of the Central Bank and fee the argument of the vulture funds abroad to return to requests for embargoes on the reserves with the theory of it being an "alter ego" of the Treasury.

From a question from LA NACION, one which annoyed her, she defended the bill of the new official. "The bill in absolute limited the autonomy; on the contrary, it reaffirmed the autonomy of the Central Bank," she said. While she said that the government would push an initiative in Congress, she said that "it's an issue that the Parliament will assuredly address when it takes up the Bicentennial Fund."

Deputy Carlos Heller, an ally of the Kirchners, will introduce a bill on this matter. Those close to Marc del Pont say that they are not aware of that initiative but that her bill "doesn't limit autonomy."

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