Argentina: President Nestor Kirchner Replaces Economy Minister
Argentine President Nestor Kirchner replaced Economy Minister Roberto Lavagna with Felisa Miceli, head of the state-owned Banco Nacion on Nov. 28, 2005. Markets dropped on the news that Lavagna, who had held the post since 2002, would no longer be in charge of Argentina's fiscal policy. Analysts saw the appointment of Miceli as a further turn toward expanded social spending under the Kirchner administration and an increase in the leftward tendency of the president's government.
Electoral win for Kirchner precedes ministry shake-up
Kirchner had recently fortified his power with an overwhelming victory for candidates allied with his faction of the Partido Justicialista-peronista (PJ) and began a series of power-consolidating actions shortly afterward (see NotiSur, 2005-11-04). The announcement of Miceli's appointment came days before Argentina and Brazil announced that they would be paying off their debts to the International Monetary Fund (IMF). The two nations made the decision so they could gain greater sovereignty over their internal fiscal policies and free themselves from the conditions the IMF imposes on debtor nations.
While his decision to replace Lavagna, arguably the most powerful minister in the government, drew the most attention, Kirchner quickly followed the move with changes in three other Cabinet spots. Foreign Relations Minister Rafael Bielsa was replaced by Jorge Taiana. Nilda Garre took over the Defense Ministry from Jose Pampuro, and Juan Carlos Nadalich took over the Ministry of Social Development from Alicia Kirchner, the president's sister. The replacements came after the ministers holding the Cabinet positions won seats in the national legislature.
Analysts and reporters characterized the Cabinet changes as a further turn to the left on Kirchner's part. Buenos Aires daily newspaper Clarin said the ministers would represent the "K Style," as some observers have dubbed Kirchner's populist, uncompromising style of governing.
Kirchner's administration inherited Lavagna from transitional President Eduardo Duhalde (2001-2003). The fiscally tight minister, appointed in 2002, played a key role in Argentina's recovery since the economic crash the year before and was loved by foreign investors. Local stocks dropped by 4.48% when it was announced that he would be resigning, although some analysts attributed the drop in part to the abruptness of the announcement and investor unfamiliarity with Miceli.
Lavagna said that irreconcilable differences between Kirchner and him led to his removal. Press outlets also noted Lavagna's frequent conflicts regarding budget issues with the head of the Ministry of Federal Planning, Julio de Vido. Kirchner created the ministry when he first entered office and de Vido was a close ally.
Lavagna's work included a successful trimming of Argentina's US$120 billion foreign debt (see NotiSur, 2005-03-11). In his outgoing statements, Lavagna said, "Four years ago it fell on us to assume with President Duhalde an extremely critical situation....Argentine society, with patience, with resignation, with work, understood and accepted many of the policies we proposed. To them goes the greatest merit."
Lavagna said that the economy "is in a strong, solid situation and in the social area we have advanced enough in repairing the general damage."
First female Economy Minister
Miceli is a 52-year-old economist and an expert on social policy. She is Argentina's first female head of the Ministry of Economy. …