Business-friendly conservative Mauricio Macri will take office as Argentina's next president Thursday, opening a new era of free-market policies after 12 years under left-wing power couple Nestor and Cristina Kirchner.
Macri, 56, has vowed to kick-start Latin America's third-largest economy by ending protectionist import restrictions, cutting heavy taxes on agricultural exports and scrapping the official exchange rate puffing up the Argentine peso.
That will mark a dramatic departure from the hands-on economic policies adopted by the Kirchners in the wake of Argentina's devastating 2001 economic crisis.
"The challenge is to get the economy working again," said Macri's future economy minister, former central bank chief Alfonso Prat-Gay.
"We have no more reserves. The exchange-rate controls make no sense. They have destroyed the economy in the provinces, and much of our industry, too."
The Kirchners presided over a remarkable turnaround after the 2001 crisis, but the economy is now stuck in a prolonged slowdown and facing a recession next year, according to International Monetary Fund forecasts.
Macri inherits these problems fresh off a come-from-behind win in the presidential run-off election on November 22, when he defeated the Kirchners' heir-apparent, Daniel Scioli.
But his room for maneuver will be limited by Congress, where the Kirchners' coalition will be the largest party in the lower house and have an absolute majority in the Senate.
Macri, the son of a wealthy businessman, rose to fame as the president of Argentina's most popular football club, Boca Juniors, during a storied string of trophy wins.
The twice-divorced father of four, who is married to a former model, was then elected Buenos Aires mayor in 2007.
He won the presidential race at the head of a broad coalition called "Let's Change."
His administration will be tasked with restoring confidence in the economy, both at home and abroad, and refilling the state's coffers after reserves sank below $30 billion.
He will also have to find an exit from Argentina's drawn-out fight with American hedge funds that are demanding full repayment of debt defaulted on by Buenos Aires in 2001.
The messy US legal battle has derailed the country's efforts to restructure its debt and left it cut off from global capital markets.
Prat-Gay said Argentine officials would head to New York this week to resume negotiations that essentially collapsed under the confrontational Kirchner.
"Mauricio Macri will opt for a conciliatory approach," said investment bank Natixis.
Its analysts forecast rising prices as Macri lets the currency weaken, but predicted inflation would then ease.
Inflation, a longtime bugbear of the Argentine economy, has stood at more than 20 percent for the past eight years.
- Corporate cabinet -
Macri has named a like-minded cabinet, with ministers hailing from the ranks of companies like IBM, Shell, Monsanto, General Motors and Deutsche Bank.
Just four are women.
A social conservative, Macri opposed the legalization of gay marriage in Argentina in 2010, firmly opposes abortion and once criticized what he called "uncontrolled immigration" under Kirchner.
On the diplomatic front, Argentina is poised to pivot away from its chummy ties with Latin America's left-wing governments, and back toward the United States and Europe.
Macri already fired a warning shot to that effect by calling for Venezuela to be kicked out of South American bloc Mercosur for violating its "democracy clause."
He back-tracked after Venezuela's opposition won legislative elections Sunday -- a victory that, like his own, suggests a tilt to the right in Latin America after more than 15 years of dominance by the left.
But Macri will have to deal with the difficulties of divided government, at least until mid-term congressional elections in 2017.
"With Kirchnerism still the largest party in the lower house and majority in the Senate, the challenges for governability are considerable," said Carlos Caicedo of economic consulting firm IHS.
The crowd on inauguration day will include King Juan Carlos of Spain and most of South America's presidents.
Business-friendly conservative Mauricio Macri will take office as Argentina’s next president Thursday, opening a new era of free-market policies after 12 years under left-wing power couple Nestor and Cristina Kirchner.
Macri, 56, has vowed to kick-start Latin America’s third-largest economy by ending protectionist import restrictions, cutting heavy taxes on agricultural exports and scrapping the official exchange rate puffing up the Argentine peso.
That will mark a dramatic departure from the hands-on economic policies adopted by the Kirchners in the wake of Argentina’s devastating 2001 economic crisis.
“The challenge is to get the economy working again,” said Macri’s future economy minister, former central bank chief Alfonso Prat-Gay.
“We have no more reserves. The exchange-rate controls make no sense. They have destroyed the economy in the provinces, and much of our industry, too.”
The Kirchners presided over a remarkable turnaround after the 2001 crisis, but the economy is now stuck in a prolonged slowdown and facing a recession next year, according to International Monetary Fund forecasts.
Macri inherits these problems fresh off a come-from-behind win in the presidential run-off election on November 22, when he defeated the Kirchners’ heir-apparent, Daniel Scioli.
But his room for maneuver will be limited by Congress, where the Kirchners’ coalition will be the largest party in the lower house and have an absolute majority in the Senate.
Macri, the son of a wealthy businessman, rose to fame as the president of Argentina’s most popular football club, Boca Juniors, during a storied string of trophy wins.
The twice-divorced father of four, who is married to a former model, was then elected Buenos Aires mayor in 2007.
He won the presidential race at the head of a broad coalition called “Let’s Change.”
His administration will be tasked with restoring confidence in the economy, both at home and abroad, and refilling the state’s coffers after reserves sank below $30 billion.
He will also have to find an exit from Argentina’s drawn-out fight with American hedge funds that are demanding full repayment of debt defaulted on by Buenos Aires in 2001.
The messy US legal battle has derailed the country’s efforts to restructure its debt and left it cut off from global capital markets.
Prat-Gay said Argentine officials would head to New York this week to resume negotiations that essentially collapsed under the confrontational Kirchner.
“Mauricio Macri will opt for a conciliatory approach,” said investment bank Natixis.
Its analysts forecast rising prices as Macri lets the currency weaken, but predicted inflation would then ease.
Inflation, a longtime bugbear of the Argentine economy, has stood at more than 20 percent for the past eight years.
– Corporate cabinet –
Macri has named a like-minded cabinet, with ministers hailing from the ranks of companies like IBM, Shell, Monsanto, General Motors and Deutsche Bank.
Just four are women.
A social conservative, Macri opposed the legalization of gay marriage in Argentina in 2010, firmly opposes abortion and once criticized what he called “uncontrolled immigration” under Kirchner.
On the diplomatic front, Argentina is poised to pivot away from its chummy ties with Latin America’s left-wing governments, and back toward the United States and Europe.
Macri already fired a warning shot to that effect by calling for Venezuela to be kicked out of South American bloc Mercosur for violating its “democracy clause.”
He back-tracked after Venezuela’s opposition won legislative elections Sunday — a victory that, like his own, suggests a tilt to the right in Latin America after more than 15 years of dominance by the left.
But Macri will have to deal with the difficulties of divided government, at least until mid-term congressional elections in 2017.
“With Kirchnerism still the largest party in the lower house and majority in the Senate, the challenges for governability are considerable,” said Carlos Caicedo of economic consulting firm IHS.
The crowd on inauguration day will include King Juan Carlos of Spain and most of South America’s presidents.
