The dispute over the future of economic policy in the Government of Javier Milei was exposed, in the last hours, with the marked differences in the course proposed to the president by two very important figures who were already part of a fierce internal conflict in the years of Macriism. The Minister of Economy, Luis Caputo, and the advisor without portfolio but with high pretensions, Federico Sturzeneggerthey once again clashed strongly over the former BCRA’s attempt to establish itself in a “super ministry” that would end up emptying “Toto” of power.
According to what they entrusted to Page I12 According to official sources, Sturzenegger’s advance, initially supported by Milei, must have been stopped by the cabinet priests and the small table, who recommended that the president cut off the superpowers of a cadre with serious desires to manage power.
The chronology of events has an initial fact, which is Milei’s obsession, already being elected president, with Sturzenegger occupying the Ministry of Economy. That was precisely what delayed the appointment of an important official to the position almost until the last moment, finally settling on Caputo.
What Sturzenegger asked for
To understand the story told below, it is necessary to know that Milei always considered, and said so in public, that Caputo was a mesadinerista expert at losing reserves. Even, It was the President himself who blamed him for having escaped part of the money from the Monetary Fund (IMF) loan to Mauricio Macri.
On the other corner, Sturzenegger is Milei’s alter ego, the one who believes the most in the destruction of the State and the total deregulation of the economy, and also the one who is not afraid of making risky moves. What’s more, Sturzenegger was not part of Milei’s government until now because Caputo asked to have all of his people in strategic places, such as the Central Bank (BCRA), to accept the chair in the Treasury. Today, that tension is already vox populi, a context that this newspaper has been recounting for months.
That said, Sturzenegger has been writing for several weeks the details of what he calls “my new ministry.” In that document, the former BCRA noted staying with Industry, Mining, Senasa and INTI, among other sectors. His idea is to “deregulate more or eliminate” some of those portfolios. The next step in writing was to take that plan to Milei: “With me, there isn’t a single gnocchi left,” Sturzenegger told the president, who became fascinated with the idea, in line with his project to destroy the State. “Go ahead,” Milei replied.
But the execution of that program has several operational and many political problems. One of them, that with this scheme Economy would only be managing the Treasury and Finance and the BCRA, the fiscal, monetary and inflationary policy. Everything that matters to the President and that, at the same time, empties Caputo of real power, giving Sturzenegger the management of everything else and leaving the current minister as a kind of Secretary of Finance. In short, he would leave him weakened and on the verge of leaving office.
The brake on the “small table”
As the President has an unconventional personal dynamic, what for him was an attractive plan, for the political table it was a matter of general stability of the Executive order. So there was a circumstantial alliance between Minister Luis Caputo, advisor Santiago Caputo and the Chief of Staff, Guillermo Francos, to warn the president of the inconvenience of empowering Sturzenegger so much.. For this reason, the meeting that Milei was going to have – prior to her awards trip to Europe – with Sturzenegger was adjourned, to define a place and ranges of power. “Federico is going to enter, but with less influence,” they say inside the Casa Rosada. In its May 26 edition, this newspaper reflected details of a conversation between Milei and his inner circle in which he left the following phrase: “This is two plus two, it’s so obvious, (Sturzenegger) is a person of my ultra confidence and will lead the stage of structural reforms (…) Caputo’s replacement will arrive when the low inflation rate and fiscal surplus are consolidated. This will be the beginning of the second stage of structural reforms. At this time, Fausto Spotorno, a member of Milei’s team of economic advisors, confirmed that Sturzenegger is the next chapter of the President’s plan.
In any case, today the Government is measuring the impact of the clash, because, in addition, Milei had been having a very firm approach to Sturzenegger’s paintings: a few days ago, he brought Demian Axel “Satan” to the G7 Reidel, head of the advisory team, Federico’s man, former BCRA and staunch enemy of Caputo. He was the only technical companion to Italy. It was not Caputo, who was not accompanying the president this June 20 in Rosario, where Flag Day was celebrated.
It is worth remembering that the Caputo Boys responded, during the Macrismo, to the Marcos Peña line, which was the one that ended up intervening in Sturzenegger by the BCRA, removing him from the Government and starting the fall of the PRO management. On the other hand, those around Sturzenegger say that the last few weeks had negative economic signals for Caputo that encouraged him to accelerate to enter the Government.
The IMF and the dollars that are not there
The IMF Staff Report showed, for Sturzenegger’s entourage, that the organization agrees with the conceptual nature of the adjustment, but sees that the rest of the policy is faltering and that this puts at risk not only political and social stabilization, but also the adjustment in itself. Furthermore, Sturzenegger perceives that Caputo is having gestures that he associates with Keynesianism, and that this could lead Milei to a failure similar to the one Macri had when she stopped halfway in her initial task. The case of the IMF is not minor: Caputo should have explained to Milei why the organization led by Kristalina Georgieva wrote in her report that it will soon end the blend of dollars for agriculture to liquidate. “It is a reference tied to resolving everything else, I don’t know why they put it that way,” the minister explained to his superior.
In that context, Caputo is entering a trap: without dollars, inflation began to skyrocket and the devaluation pressure worsens due to the exchange rate delay. For Sturzenegger, this is a negative fact because, in addition, prices were already being trampled and economic deregulation was being stopped. “I know what the President wants, and it is what has to be done, we must not give up,” Sturze tells his entourage, among whom the former BCRA Lucas Llach and Shunko Rojas, former Secretary of Foreign Trade in the government, stand out. of the PRO.
To get out of the crossfire Caputo seems to have intentionally left his toothbrush forgotten in the bathrooms at Olivos and Balcarce 50. When he saw that Joaquín Cottani, the cavallista deputy minister, had been criticizing him in the same way as Sturzenegger and Domingo Cavallo himself , forced his departure and looked for a replacement with an ultra. The Chilean José Luis Daza, former advisor to Antonio Kast in Chile, is not only a friend of Caputo but was a partner of Reidel in the QFR fund in New York and is a crusader willing to support the fierce adjustment. Thus, the Sturzenegger and Caputo dispute was stopped or softened but it remains spicy between them and shows the differences over the plan to follow that exists inside the Milei government. The president asked them to speak Among themselves, perhaps they do.
