Argentina's Macri Sworn in as President for Four-Year Mandate

Argentina's Macri Takes Office With Economic Challenges
  • Ceremony boycotted by outgoing leader and group of lawmakers
  • Macri has pledged to lift currency and trade controls

Argentina’s Mauricio Macri was sworn in as president for a four-year term after a dispute with outgoing leader Cristina Fernandez de Kirchner led her to pull out of the event. Some lawmakers also boycotted the ceremony.

Macri was mobbed by supporters when leaving his home in the Palermo neighborhood of the capital with his wife and daughter before being driven to congress. The 56-year-old former president of the Boca Juniors soccer club and a two-time mayor of Buenos Aires will try to be the first non-Peronist to finish his term since 1928.

Starting tomorrow, Macri will have to follow through with campaign pledges to let the peso float, cut agricultural export tariffs, relieve an income tax load on the middle class and lift trade restrictions; all while trying to rebuild international reserves from a nine-year low. Inflation in South America’s second-largest economy is about 25 percent while the economy has been stagnant for the past four years. Macri called on Argentina to unite and work as a team to fight poverty, drug trafficking and improve education.

“Diversity will make us better,” Macri said during a speech in Congress after taking the oath. “This sounds incredible after years of futile and useless infighting, but it’s now time to grow and improve as one nation.”

With his electoral rival Daniel Scioli in attendance as well as regional leaders including the heads of state from Chile, Uruguay, Ecuador and Colombia, Macri said the policies of the outgoing administration to “lie” about economic statistics and try to influence the judicial branch has hurt the country. Fighting corruption will be a priority, he said.

Changing Policies

Macri has tapped a former JPMorgan Chase & Co. banker as his finance minister, a former head of Royal Dutch Shell Plc’s local unit as his energy minister and left one minister in place from Fernandez’s cabinet.

When asked about when the exchange rate will be floated, Finance Minister Alfonso Prat-Gay said they are still evaluating the first few moves and won’t barrage people with a package of economic measures.

Argentina’s official peso, which has been closely controlled by the central bank, currently trades at 9.75 per dollar. On the black market, which was spawned by a myriad of currency controls installed by Fernandez, the currency trades at about 14.7 per dollar. Macri wants a single exchange rate as soon as possible.

Macri has his work cut out in both chambers of Congress but his approach will be different in each. In the Senate, where the Peronist Victory Front alliance (FPV) has a majority, negotiations will mostly take place far away from Buenos Aires. Macri will need to use his ability to provide discretionary funds to negotiate with Peronist governors who control the senators from their provinces.

The lower house is more fractured, with no alliance enjoying a majority, although the Victory Front and its allies has the largest minority with 105 out of 257 seats. Macri’s Pro has 46 seats while his electoral campaign allies, the Radicals, hold 44. Key to achieving a majority here could be the dissident Peronists led by Sergio Massa: his alliance has 52 seats.

In some cases, Macri may not have to resort to Congress. The outgoing government last month chose to extend the economic emergency law which has been in place since 2002 and gives the president decree powers in certain economic matters.

“The challenges ahead are enormous and problems don’t all get resolved in one day,” Macri said. “We’ll look to take small steps and learn from our mistakes while convinced that if we work together, Argentina will be unstoppable.”

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