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Cristina gives the thumbs-down to Moreno at INDEC
Clarin
August 15, 2008

For the government, the conflict inside the statistical organization amplified the economic imbalances. On the weekend, the decisions will be taken over seeking to recover confidence.

By Marcelo Bonelli

Cristina Fernandez de Kirchner was direct at the meeting held with her inner circle: "There have to be measures taken to recover confidence at INDEC."

And she added, without flinching: "It's obvious that we have a problem. Now it's necessary to inject credibility into the organization."

Thus, the President gave the thumbs-down to the controversial leadership of Guillermo Moreno at the INDEC and green-lighted a series of consultations with economists with the intention of conferring a new leadership with credibility and prestige at the agency.

Clarin confirmed that this happened in private in the yard at Olivos during the meetings in which the course of the economy was evaluated. The decision that the President adopted was reflected afterwards in the strong statements from official spokespersons. Agustin Rossi, Patricia Vaca Narvaja and Carlos Kunkel used identical public statements to what they head from Cristina Kirchner.

For the government, there are economic imbalances, but the President arrived at a conclusion: that those problems are magnified by the political conflict at INDEC.

The decisions will be adopted this weekend and the plan is to announce the changes next week.

The President consulted two economists and sorted through various alternatives in names that could take up the heavy task of giving confidence to inflation data.

She spoke with Aldo Ferrer and sounded out Roberto Frenkel on presiding over the reconstruction of INDEC. She also had indirect counsel from developer Hector Valle and with Beatriz Nofal.

Thus began the secret story of a relief that would imply a change in policy. Guillermo Moreno will continue at the Domestic Trade secretariat, but his power will be diminished.

The issue was first present last weekend at the yard at Olivos. The President convened an "economic mini-cabinet" over the bond crisis.

It was after speaking by phone to Hugo Chavez. She asked for explanations over the massive sale of Argentine bonds and got a commitment from the Venezuelan: this past Wednesday he bought back part of the sold bonds.

The economic team is made up of four members: Cabinet Chief Sergio Massa, Minister Carlos Fernandez and the heads of the Central Bank, Martin Redrado, and Banco Nacipn, Mercedes Marco del Pont. Also participating, at times during the meeting, was ex-President Nestor Kirchner.

Redrado gained more room in the presidential circle after the exit of his enemy, Alberto Fernandez. The President gave him the financial and exchange rate management in the midst of the farm sector conflict.

But nobody in the immediate moment is looking at his ascension to the Palacio de Hacienda. The rumor about the exit of Carlos Fern ndez came out of the opinion of the Cabinet Chief about the need to have a publicly "more active" minister at the helm in Economy.

On Saturday at Olivos the bond repurchase plan was approved. Massa suggested that Fernandez and Redrado convene specialists to explain the measure before the opening of the markets. But the Economy Minister shot that down: "No speaking, no. I prefer to put out a release."

Massa believes that the economic situation is not weak, and despite some clouds above, will again show its solidity. But he thinks that the low profile of the Palacio de Hacienda is impeding the government from going to battle successfully against ultraliberal economists that always criticized the model and now are wanting to cash in politically on the Casa Rosada. Among them are Miguel Broda, Juan Llach, Domingo Cavallo and Daniel Artana.

Also, the rumor against Fern ndez came out of the business community. They want a minister with greater presence.

This week the Industrial Union was weakend by a lamentable internal fight. On Tuesday there were squabbles and terrible accusations, which ended when Juan Lascurain threatened to resign the presidency of the UIA.

The meeting between the President and the ministers was sincere and all admitted to economic errors. It was then when Cristina communicated for the first time her decision to remove Moreno from INDEC.

Redrado and Massa agreed that this move has to be accompanies by another: anti-inflation measures.

At Olivos there were admissions of errors on the foreign front and that encouraged rumors over a supposed default. First, in April and at the IMF, imprudently and without anesthesia, ex-Minister Mart n Lousteau spoke of "reprogramming" the foreign debt maturities for next year. After, there was the total absence of Argentine officials to explain what is happening in the country at financial centers, and what were the financial needs. This was topped off with the see-sawing in Venezuela, which raised suspicions about supposedly confidential information that Chavez had about an Argentine default.

There was also a lot of criticism at Olivos about the behavior of AFJP. Massa from his spin at ANSeS was charged with reproaching Sebastian Palla for the decision by companies to sell bonds massively on Black Thursday and Black Friday.

The conclusion was as follows: there exists no financial plan that allows reaching, without summersaults, US$4 billion in additional needs for next year.

Martin Redrado spoke of the illogic of Argentina paying off obligations to the IDB and World Bank over the loans that it receives.

And a transcendent decision was adopted: he spoke of initiating a real and formal negotiation with the Paris Club to break out of Argentina's financial isolation.