He celebrated the half-sanction of the “base law” and anticipated a “rapid” economic recovery

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The “cultural battle” is one of the central fronts disputed by Javier Milei’s management, and constitutes Federico Sturzenegger’s work territory. The former president of the Central Bank during Mauricio Macri’s administration is one of the president’s “star” advisors and the person responsible for translating the liberation of the economy that he promotes into regulations.

For more than a year and a half, the economist worked with a team to write the extensive legal script for deregulation.

They bear the seal of the “mega” DNU 70/2023 that Milei signed in December, valid although challenged in certain points by the Justice Department. And also the “base law” project, sanctioned days ago by Deputies and now being discussed in the Senate.

Although the parliamentary negotiation reduced the ambitious initial version significantly, Sturzenegger celebrated what was approved in Córdoba and considered it a first step. Furthermore, he revealed that with several of the rejected changes the Government moved forward – or will – through regulations.

“A great virtue of the original basic law was that it allowed interpellation on issues that Argentina did not want to discuss. Change is a collective construction where the President acts as a catalyst. There is a lot of what has been done in these 50 years to change,” she analyzed realistically.

Arrived to speak on both legal instruments, Sturzenegger gave a conference under the motto “Argentina: Urgent Freedom.” The event was organized at the Quinto Centenario hotel by PRO senator Carmen Álvarez Rivero (absent because she was in the Senate) and Civilitas, an entity chaired by Sebastián García Díaz, who served as moderator.

Sturzenegger spoke before businessmen, leaders and the general public at the Quinto Centenario hotel. Sebastián García Díaz, president of Civilitas and member of the PRO, served as moderator and organizer of the event. (Nicolás Bravo / The Voice)

The advisor presented and answered questions previously sent to a large audience of businessmen (the president of the Industrial Union of Córdoba, Luis Macario, stood out) and some leaders, such as the national deputy of the PRO Soher El Sukaria and Gabriel Bornoroni, president of the La Freedom Move forward in that chamber. Sturzenegger took the opportunity to publicly thank him for his work towards the passage of the basic law.

The indicator that anticipates “soon” recovery

Although he clarified that Milei’s management is not “macro”, he could not avoid speaking out regarding the direction of the economy. “Javier decided to face the heart of the problem: the fiscal imbalance. In January he achieved a surplus that I never thought could be achieved so quickly. “It is the anchor and more sustainable than you think,” he said.

Regarding the possible recovery of the economy, he said he was optimistic: “The film is encouraging. Inflation will continue to fall. Javier is solving the central ailment that is the deficit. The sharp drop in country risk indicates that: declines like this in Argentina always happened with recovery. “They indicate a change in expectations and confidence.”

The macroeconomist cited the reappearance of mortgage credit as another sign that the economic transition is coming “faster.” “If the fiscal surplus continues to consolidate, the recovery will be rapid,” he estimated.

Although I avoid drawing time horizons, he did speak of “five more months” of balance in public accounts as a period after which a deeper discussion can be opened on the tension between public spending and tax cuts. There he identified the moment to analyze, for example, an elimination of withholdings; always tied to the decision to moderate state spending by the same magnitude.

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“Should we lower the Country tax? Do we eliminate retentions? Or do we raise pensions? “It will be extraordinary to be able to have all those debates in Congress, for the political system to determine what its priorities are,” he said. Unlike what the President often raises when he minimizes or denigrates the role of Congress; Milei’s advisor alluded to the body on several occasions as a natural space for discussion and processing of the profound changes promoted by management.

Asked about the political “sustainability” of the Libertarian Government, he drew a parallel with the successful experience of transformation in Australia and quoted its former prime minister, Paul Keating: “The processes of change in a democracy are ‘dirty’, you make some progress; they change it for you, etc. The wallows are part of the process. The important thing is that society buys it.”

“Light” labor reform

Throughout his talk, Sturzenegger insisted that the central objective pursued by the DNU and the base law is to return “freedom” to the people and stimulate “competition” in economic activity, since from his point of view – which is that of Milei – that is the path to economic development.

“The model of freedom and growth points to inclusion,” he insisted. And he cited as an example the changes in labor legislation promoted in the DNU that were finally included, in part, in the base law: “We can accept that the current regulations were successful for the formal unionized sectors, of course. But in reality this occurred along with an extraordinary level of exclusion (informal and precarious workers) that is a result of the system.”

In a subtle way, he regretted that the elimination of the mandatory contribution to unions by non-affiliated employees had left the project; but he highlighted the elimination of fines in the calculation of compensation.

“The” DNU article and small planes with passengers

For its author, the most important article of the DNU due to its scope and symbolism is the one that changed 958 of the Civil and Commercial Code, which regulates contracts of different types between parties: “The modification establishes that what prevails from now on between private is what the parties agree to voluntarily, not what is established by code. This applies to those points not resolved between the signatories. “That change is an extraordinary freedom.”

The deregulation of rents is an example that the official cited as positive: “The supply of housing was expanded and the rental value grew 40% below inflation,” he insisted.

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Another case that stood out is the deregulation of airline activity. Here, he revealed that he is working on a regulation that will allow “small aircraft” such as light aircraft to carry passengers. “In this way, you can have, for example, flights such as Venado Tuerto (Santa Fe)-San Fernando (Buenos Aires. Or one that connects Córdoba and the Piedra Pómez field, a place in Catamarca that if it were in the United States would be the Canyon del Colorado”; he illustrated alluding to the tourist potential of the beautiful Catamarca landscape.

Unregulated Yerba Mate

Sturzenegger defended the changes in deregulation applied to the yerba mate market and to the institute that sets prices in the sector (INYM).

“They produce a product that 96% of Argentine families consume and they hardly export,” he challenged. “In the DNU, we repealed the ban on bottling yerba in provinces like Córdoba and transformed the INYM from a price-setting body to one that certifies quality and promotes international trade similar to the wine industry; “which managed to make Argentine wine exports 5% of world exports,” he said, alluding to the end of the regulations that required yerba to be bottled only at origin (Misiones and Corrientes, where yerba mate is grown).

Strictly speaking, in Córdoba yerba is already being divided and packaged since the regime does allow for the possibility of doing so when the yerba is mixed with herbs, fruits or essences; a segment of that market (compound and flavored herbs) in which Córdoban brands are national leaders.