The day Kirchnerism was about to break with Alberto F

President Alberto Fernández never intended to finally break with Kirchnerism. I had decided. Even in moments of extreme tension, his goal was always to maintain the formal unity of the front that had brought him to the Casa Rosada. However, there was exactly one moment when Cristina Fernández de Kirchner and Máximo Kirchner were on the verge of breaking up with him for good. And at this breaking point, the ultimate story of the Frente de Todos government could have been different. Maybe better. Maybe worse. But undoubtedly different.

This moment was focused on a short and crucial period: between Friday 1 and Monday 4 July 2022. At that time, Martín Guzmán was still Minister of Economy and continued to retain the explicit support of the President and a significant part of the Cabinet. This Friday, Guzmán Alberto Fernández issued an ultimatum that condensed months of internal attrition: either he could implement a profound and accelerated change in energy subsidy policies and reduce public spending to cushion electricity, gas and water tariffs for households, businesses and businesses, or he submitted his resignation.

Alberto Fernández agreed with him. He acknowledged that the government was behind on one of the International Monetary Fund’s (IMF) key corrections and promised a forceful policy definition. On Monday, July 4, he assured her, he would publicly announce the start of a specific phase of subsidy cuts, even if that meant a confrontation with the vice president. Years later, Fernández himself recounted this episode in the podcast No hay plata, as he reflected on the most difficult phases of his term in office and, in particular, his life together with his vice president.

The problem was that Guzmán no longer trusted the president’s word. He had a lot of background knowledge. On May 7th of the previous year he tried to push ahead with the reduction of subsidies and was met with open resistance from the then Undersecretary of State for Energy, Federico Basualdo. Guzmán had instructed him to introduce the so-called tariff segmentation, a three-tier system that distinguished between unsubsidized users, partially subsidized users and fully subsidized users.

This scheme had been negotiated with the IMF and was expressly included in the agreement signed on March 25, 2022. However, Kirchnerism refused to validate it. The worst thing for Guzmán was not only the political resistance, but also the operational paralysis: Basualdo directly ignored the minister’s instructions and followed the instructions of his actual political boss, the vice president, who was convinced that it was not time to raise interest rates. This is even less true if it was a requirement of the Fund and the person responsible for its execution was Guzmán.

At this point, the relationship between the economics minister and the hard core of Kirchnerism was tense. Guzmán had negotiated, concluded and secured parliamentary approval for the agreement with the IMF, ignoring the strategy advocated by Máximo Kirchner. The MP proposed an agreement spanning more than twenty years and called for bringing to justice those responsible for the $54 billion loan granted during the government of Mauricio Macri. A politically confrontational position that, from a technical point of view, cannot be achieved at any negotiating table with the international organization.

The “Extended Facilities” program was approved in Congress with votes from the PRO and some radicalists, while the hardliners of Kirchnerism abstained or voted against. This parliamentary scene ultimately burned any possible bridge between Guzmán, the vice president and her son.

Although the agreement had already been approved in March, the reduction of subsidies was an urgent requirement for the period May-December 2022. However, there was no concrete plan at the beginning of July.

The tariff system remained intact and Kirchnerism avoided any dialogue with the fifth floor of the Palacio de Hacienda. Faced with this blockade, Guzmán issued his ultimatum.

Alberto Fernández met him again. He acknowledged the delay and promised a political solution: there would be a new energy minister from Monday. The chosen one was Aníbal Fernández, then Minister of Security, a leader with his own weight in the Cabinet and ready to advance tariff segmentation and accelerate the construction of the Néstor Kirchner gas pipeline, even in the face of opposition from the Vice President, who questioned the project due to the provision of inputs from Brazil.

The only counterpoint between Guzmán and Aníbal Fernández was hierarchical. The Minister of Economy wanted the Buenos Air native to take over as secretary and not as a peer. Aníbal refused the demotion, although he agreed to carry out the mission assigned to him by the President. This Friday, everything seemed to be heading towards a high-voltage political crisis, with an internal front ready to confront Kirchnerism.

It didn’t happen. Guzmán was suspicious and wrote an explosive seven-page document that same night. The next day, Saturday, July 2, he heard Cristina Kirchner’s speech live in Ensenada, during the event marking the anniversary of the death of Juan Domingo Perón. There, the vice president questioned parts of the cabinet, the agreement with the IMF, customs policy, import management and the lack of political coordination. Guzmán interpreted this message as a final rejection.

He didn’t wait until Monday. He published the document on social networks and submitted his resignation. He attempted to contact the president but received no response.

Alberto Fernández, like the rest of the country, learned of the departure of his economy minister through the media.

Aníbal Fernández was never energy minister. There were no immediate changes to tariff policy. The scheme devised by Guzmán was finally later applied by Sergio Massa, without resistance from Kirchnerism and with the same diagnosis that had previously caused the implosion. Those four days in July irrevocably marked the beginning of the end of the political experiment that began in 2019.