Argentine President Alberto Fernández appointed Silvina Aída Batakis in a desperate attempt to calm investors amid a 64% year-over-year inflation rate.
When the former economic minister for the Province of Buenos Aires, Silvina Aída Batakis, took on the role of economic minister of Argentina, she was challenged to do the opposite of what she had stood for during the best part of her political career.
Once known for her socialist policies, “the Greek”—as Batakis is popularly regarded in her country for her love of Aristotle quotes and Greek ancestry—did the only thing she could in her first interview: attempt to calm the markets. She linked her country’s inflation to the current global scenario and promised more-active management of her country’s base interest rate, currently at 52%.
Furthermore, Batakis promised tighter control of government spending—one of the factors driving the peso lower. “We need an economic program that puts us on the path of fiscal balance,” she said in a July 5 television interview, without specifying next steps.
Born in Rio Grande, Argentina, in 1968, Batakis holds a master’s degree in public finances and environmental economics from England’s University of York. Argentine President Alberto Fernández appointed the left-wing economist on July 3 in a desperate attempt to calm investors amid a 64% year-over-year inflation rate in June, a plummeting Argentine peso and continuing tensions over a $44 billion debt renegotiation with the International Monetary Fund (IMF) that had been approved in March—a toxic combination that led to the resignation of her predecessor, Martín Guzmán.
“We are still trying to understand whether Silvina will behave as she has during her entire career, or as she has been portraying herself so far,” explains Sylvia Colombo, political correspondent in Buenos Aires for Folha de São Paulo. “The peso-dollar exchange rate responded slightly positively [to Silvina’s statement]. However, currently the word for markets is ‘caution’; as her statements didn’t give any specific guidance on her economic outlook.”
While Batakis’ declarations may have sounded evasive to most investors, it was enough to spark opposition from her once-supportive left-wing base, who stormed the streets of Buenos Aires and other cities against tighter social-spending policies in the aftermath of her nomination.
Argentina’s political and economic turmoil dates as far back as 1956 when the country signed the first of 21 loan agreements with the IMF. Since then, it declared a moratorium nine times, spooking foreign investors from buying the country’s all-time high $376 billion debt and thus depreciating the peso.