Final point of the program with the IMF

Sunday, a very large part of society voted against the economic policy of
Mauricio Macri. The immediate consequence of this statement has been the collapse of the peso, the increase in country risk and the decline in the shares of Argentine companies of historical dimensions. It
market reaction This is not just because Alberto Fernández, the candidate of Cristina Kirchner, has triumphed. The economic agents warned that the current program had lost the social consensus and that, therefore, it could not already be executed by Macri.

It's something Macri did not realize, at least until yesterday.
Measures who he announced were a demonstration of this new reality:
meant cancellationde facto
of the program agreed with the IMF.

The announcements made yesterday by the President, and later explained by Carolina Stanley and Rogelio Frigerio, badume that the deficit target agreed with the Fund will no longer be met. New expenses have been reported, but not new revenues. In addition, the monetary objective, which is the cornerstone of the entire building, has been abandoned. As for the trading zone without intervention: the price of the dollar has exceeded the ceiling of 51.45 dollars, without the Central Bank selling the reserves available to stop this rise. What was already known Sunday was clearer: a new program will have to be negotiated with the only financier left in the state.

On this background of crossroads, the dilemma that the country faces is significantly reduced, but especially in Macri. To control the fiscal, monetary and exchange rate variables, it is necessary to have credibility from which it was deprived at the primary level. This deficit can only be compensated by Alberto Fernández, who was named virtual president in these elections. Macri finished admitting yesterday when he contacted his rival. The replacement of the material order depends on the signing by Macri and Fernandez of a pact that places economic policy under an umbrella. This alliance must be blessed by the Fund. Yesterday, Macri and Fernández had a very sensitive conversation. This was the first indication that the course of the crisis could acquire this direction. This departure, accepted, is incompatible with electoral dynamics. Here appears the poison of STEPS, a method conceived without considering what is happening: a winner who looks like the next president inside and outside the country, but lacks the institutional legitimacy given by the elections General. And a defeated president, who must accept the conditions of his departure, but is obliged to continue to compete with the one who has already defeated him.

Macri's speech yesterday to announce the new economic measures left him far from letting go of this knot. He apologized for downplaying the electoral decision, which he attributed primarily to lack of sleep. He admitted to having demanded too much stoicism on the part of the citizens against an economic recipe whose intrinsic defects he had not recognized. And he could not admit the overwhelming victory of Fernandez, which he had not yet praised in public. He referred to him without mentioning it. He did not report any changes in his office.

Fernandez complained after Macri was still in the field. And he maintained that the decisions that he announced yesterday were thought more by the candidate than by the president. He revealed that Macri had sent him a message on WhatsApp, that he had not been able to answer because he was teaching.

This panorama was changed a few hours later when the president announced with a tweet that he had spoken to Fernández. The conversation had been long and good. And that candidate Kirchner was committed to rebaduring the markets. The foreign exchange market had already closed with a dollar to 60.07 dollars. The contact resulted, among other reasons, from the pressure exerted by a sector of the government led by Horacio Rodríguez Larreta and Nicolás Dujovne. The Finance Minister insisted Sunday on the need to hear with the winning candidate and with the Fund a program guaranteeing control of the economy until December.

Fernandez also acknowledged that the conversation was positive. According to sources close to the two interlocutors, he explained to the president that he would not respect his economic policy. But he does not want to repeat a populist experience either. He said he intends to honor the commitments made by the state. And he summed up: "It will not help me if you make a mistake, I need Argentina to grow up again next year." This dialogue is the minimum expected by the main economic agents, local and external.

It is logical that Macri wanted to communicate the news as quickly as possible. After its announcements, the peso depreciated by 6.5% and the bonds continued to fall. For example: Global 28, trading at 76.83 on Friday, closed at 49.9 on Tuesday and fell to 46.30 yesterday. The major international funds involved in this document have suffered historical losses. Argentina lost in 72 hours the lack of private external financing that it had left.

In the failures between Macri and Fernández, we play much more than the conjuncture. It foreshadows the future government but also the future opposition. The characteristics of both depend on the depth that the crisis acquires. Fernández showed yesterday that the reluctance to get involved limited his own interests. He made it clear that he was not fantasizing about the current government's bleeding. This makes sense: Macri's handling of the storm will affect the magnitude of inflation and the recession his successor will inherit. It is possible that Fernández also takes into account a very disturbing factor: the level of monetary reserves. It is true that Guido Sandleris intervened in the foreign exchange market with amounts lower than those authorized. It is understood that since Claudio Bonadio sued Cristina Kirchner, the exchange rate policy has become questionable.

About Fernández is a tacit threat: Macri can "go crazy" and, apart from the agreement with the Fund, burn reservations with total irresponsibility. This would greatly weaken the next president. Also Kristalina Georgieva, the most supported candidate to lead the organization, although she has not been elected yet. Something like Fernandez. This Bulgarian, and the main actors in public life, especially the markets, will look closely at the extent of the challenge of the next president. Because I could lose power shortly after a storm that never stops. There is Carlos Menem as an example. He benefited from an indomitable economy, mainly because of his own commitment to have Raul Alfonsin, a weakened member, absorb all costs, and he suffered nearly two years until he was able to do so. he reaches a point of equilibrium. Fernandez saw him from the inside, since he integrated the two administrations.

Another reason explains the cooperative tone that Sunday's winner adopted yesterday. The current crisis shapes the face of the next administration, not only because of its weakness or strength, but also because of the balance of power that exists within the Front of All. The candidacy of Fernández rested on an badumption: the image and the ideas of Cristina Kirchner made the return to the power impossible; therefore, one would have to run for a moderate person, able to reach the most elusive electorate. An election result as brutal as Sunday's is able to change these conjectures. The former president, who in her environment sees the euphoric, may badume that she has more social credit than she had expected. And that her ideas and programs are more viable than she supposed. The more investor confidence is far from investor confidence at the end of the transition, the more likely it is that the theory will lead to the Homeland Institute.

The predominance of the most interventionist sector was noticed on Sunday night. The owner of the stage was Máximo Kirchner, head of La Cámpora. This organization has considerably increased its territorial power. For starters, it would remain with the intentions of Quilmes, Tres de Febrero, La Plata and Mar del Plata. Besides Axel Kicillof, who won a brilliant victory in the province of Buenos Aires. The advance of this wing presented a symptom on which many had insisted during the last hours of the future decision: Mrs. Kirchner is always escorted by Carlos Zannini, new disciple of the famous Byung-Chul Han. A small trip from China from Mao to Korea from this Berlin teacher.

Fernández imagines a government backed in the alliance between Casa Rosada and the governors of the PJ, a club of lovers of the fiscal and financial order. There is no designation for the economic management of this political base. In the market, they speculate with a return of Martín Redrado in the center. He would add to the fraternity of prodigal children who already make up Fernández and the phoenix, Sergio Mbada. Yesterday, Javier Timerman, brother of Héctor, was mentioned for this post. He is a long time financier on Wall Street, who maintains a discreet dialogue with Fernández. But Timerman explained to his friends that he preferred to continue contributing to private sector ideas. The name of the future Minister of Economy is still in a nebula. Some speculations would indicate Fernandez's orientation. Some even exaggerated when talking about Carlos Melconian. Guillermo Nielsen appears in all the casts.

The most frequent forecasts speak of a progressive orientation, which would moderate Macri's fiscal and monetary inclination. But you have to check this sequence. Macri should most likely take heterodox measures, more enjoyable at Kicillof than at Redrado. Do not completely rule out debt restructuring and some control of capital. Fernandez would take a starting point that matches the ideas around Cristina Kirchner. Not with those to whom he refers.

As in the heaps of the economy, the next government acquires its profile, as does the future opposition. With the strategy he is adopting these days, Macri will not only condition his own future. It will also determine the future of the coalition that brought it to power.

The idea that Macri could be a competitive candidate for October was dropped by the leading leaders of his group. Except for himself. Marcos Peña said yesterday in the cabinet: "Whoever believes that there is no chance to submit his resignation". Other more realistic officials justify maintaining the tone of the campaign in tribute to the candidates who are still able to win.

On the other hand, it is these candidates, in general, who prefer that the legitimacy of Fernandez be recognized soon, and the directives that respond to the economic storm are in agreement with him. At their head is Larreta, who was four points behind a reelection that would make him the most likely leader of the future opposition. Other candidates, much less notorious, ask that Fernández be recognized as the new president. This was the case yesterday of the Mayor of Bahía Blanca, Héctor Gay, who said that the elections in the nation and in the province were over. The very crude definition of Gay promises a torrential court of ballots. There are already three governors from the Buenos Aires government who have started a conversation with Máximo Kirchner. This logic is understandable: the application of Macri was questioned three months ago for a much more stable economic context than the one verified after the defeat.

In the coming days, we will know how Macri will interpret the discomfort of his own group. The characteristics of the government depend on its decisions over the remaining months. Your role in the future. And the density of the future opposition.

IN ADDITION