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Argentine Minister of Economy Martin Guzman resigns in the predicament of inflation and diesel

The Argentine Minister of Economy resigned suddenly on Saturday, giving a new blow to President Alberto Ferrandes' government when the country was suffering from economic problems. ..

Martin Guzman resigned a week after the Argentine currency hit a record low against the dollar a week after intense inflation and truck drivers protesting a shortage of diesel fuel.

His successor was not announced immediately.

"I will write to you to announce his resignation as Minister of Economy," Guzman said in a seven-page letter to Fernandez on Twitter highlighting the civil war within the administration. He said it was open to the public.

To explain the tension, Guzman announced his resignation, and Vice President Christina Fernandez delivered a notable speech condemning the government's economic policy. The vice president, unrelated to Argentine leaders, is herself a former president, and the Governing Union is split among their allies.

Argentina has faced economic turmoil due to inflation and rising diesel prices.
AP Photo / Rodrigo Abd, File

Resignation is a financial mess.

As the Argentine peso fell against the dollar, on Tuesday the government began importing as local currencies reached new lows in parallel markets used by citizens and businesses to bypass official channels. Made it difficult to get the dollars to pay.

Argentina has long suffered a dollar shortage due in part to Argentine distrust of its currency in the midst of high inflation. Inflation rates have remained above 60% annually, and economists expect this rate to continue to deteriorate.

The suspension of work by truck drivers disrupted economic activity, including the delivery of grain, one of Argentina's major imports, to the port.

The government said on Wednesday that it is trying to increase the availability of diesel by allowing more biofuels to be mixed with the fuel and suspending the import tax on diesel. ..

Martín Guzmán successor was not immediately announced.
AFP via GettyImages

Argentina produces diesel, but its needs Not enough to depend on pandemics and the turmoil caused by Russia's invasion of Ukraine are raising global prices.

Analysts say that one of the reasons for the shortage is that it is profitable for oil companies to import diesel because the government has banned the government from charging for purchases in the international market. Say it's not.

In his resignation letter, Guzman suggested that at least part of the reason he resigned was due to lack of political support within the government.

"From the experience I have lived, I think it will be fundamental to work on political agreements within the Governing Union so that the person who replaces me can be centrally managed. Necessary macroeconomic policy measures ... To tackle future challenges. ”

Guzman has been in his position since the inauguration of the Fernandez administration on December 10, 2019, and has long been the most prominent figure in the Cabinet. Was one of them.

In the early days of the administration, he was regarded as a solid ally of the president, but at the same time, a person who could help bridge the often difficult division of the governing coalition. However, in recent months he has clashed with several officials who are loyal to the Vice President, and his influence within the government appears to be diminishing.

The first challenge and success in Guzman's work was to negotiate a debt restructuring in Argentina and avoid default.

He later reached an agreement with the International Monetary Fund for debt relief, but said that some of the more left-handed elements of the government were too many concessions to impede Argentina's economic growth.

Members of the alliance with the Vice President voted against the agreement with the IMF in Congress, and Guzman's resignation raises questions about whether the country can meet the terms of the deal.

In his resignation letter, Guzman's main goal at employment was to "calm the economy," which would "solve the problem of unsustainable external debt, state only." Not all over Argentina. "