Economist Guillermo Calvo assured that a triumph for Alberto FernÃ¡ndez and Cristina Kirchner "is the best thing that could happen for the country" and he is already being mentioned as a link between the would-be government and the IMF.
The academic from the University of Columbia suggested that in order for the country to recover, "it is necessary to do things that are politically very unpopular, which will only be able to be done if the economy collapses".
"I'm going to be rather skeptical - I think that investors, if Macri continues his tenure, have more time to withdraw their money, because Macri has not shown any capability to handle this situation. What's more, he's made it worse", disclosed Calvo to Diario Financiero de Chile, during a visit to the country which included other journalistic pieces with equally explosive thoughts.
"I do not support Cristina or her people, but I must acknowledge something: if Cristina wins, she can look back and say ?look at the mess that this man left us in. Now I have to introduce cuts he should have introduced yet did not'. The advantage that the left has in these situations is that the opposition is from the right, whilst it actually exercises right-wing politics" said the economist.
"Suddenly Cristina is the best thing that can happen to the country, strangely enough" stated Calvo, and he predicted that if Peronism wins, the party will make cuts with the support of the people, blaming the previous government".
A government with Cristina may be more credible than one with Macri, who would win with marginal votes, minority seats in congress and an inability to say, ?what I did was wrong'. The cuts that Macri would have to make would in principle be extremely bad. He'd need someone of prestige, but I don't know if such a person would want to be part of his government. He's in an extremely sticky situation, he added.
This point of view, from the economist who predicted the Tequilla effect, is by no means coincidental. Sources close to the talks confirmed to LPO that Calvo made contact with the director of the IMF for the western hemisphere, the Argentine-Mexican Alejandro Werner, and they established a link with Guillermo Nielsen, who works for Alberto FernÃ¡ndez and is poised to be his future Chancellor, as a preliminary step before entering into the ministry of Economics.
Calvo and Nielsen will cross paths in August as they attend an event that sees the University of Columbia economist invited as a star guest.
"The main issue with Argentina is that of credibility. Therefore, no one is considering any ambitious investment plans. Investment is collapsed; however, we cannot blame the government given that this is now an electoral issue. In order to make it to elections, they are ?ironing out' the exchange rate with an interest rate, which, if the system doesn't collapse, is extremely high in terms of dollars. It is also a short-term solution, which leads investors to think that since this cannot last, they are unable to trust the government" Calvo concluded.
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