MercoPress. South Atlantic News Agency

Uruguay’s ruling coalition admits divisions in economic and financial policies

Economy minister Fernando Lorenzo and his team have been under intense attack from inside the coalition

Uruguay’s ruling coalition main grouping and which responds to President Jose Mujica expressed their full support for the Executive and Economy minister Fernando Lorenzo and his team, which has been increasingly questioned lately for its “excessive orthodoxy”.

“Lorenzo and the team who supports him are good, and they have given evidence of this hundreds of time, not only from a technical point of view but also politically”, said Alejandro Sanchez from the MPP, the senior grouping in the Broad Front ruling coalition.

He added that what happens is that in the ruling coalition “there is not an only line of thinking and the worst thing that can happen in politics is to run out of ideas and the main problem is the opposition, unable to work out alternative proposals. Therefore, the possibility of other interesting proposals with an impact is born out of the diversity of ideas of our ruling coalition”.

The MPP, which responds to President Mujica has clashed openly with other sectors of the ruling coalition particularly those supporting Minister Lorenzo on taxing, income distribution and a greater government participation in Uruguay’s economy.

Lorenzo is supported by Vice President Danilo Astori, an economist and former Economy minister who together with his team have adopted a completely orthodox approach to economic and finance affairs and refuses point blank to change the rules of the game in taxing “since this can scare investors”.

However the MPP is pushing for a tax on landholdings, more resources for education and the Uruguayan state participation in mining, ports, agriculture, the country’s main industry, meat and in infrastructure investment. It also supports a different approach regarding monetary and foreign exchange policies.

These proposals have divided the cabinet and the ruling coalition in Parliament.

In practical terms when clashes started a former Deputy Economy minister, Pedro Buonomo who belongs to MPP left the post and is now advisor of President Mujica. He was replaced by another economist, Luis Porto who apparently was an Astori man but turned out to be a man from the president, who travels with Mujica, has publicly disagreed with Lorenzo, exchanged insults and on one occasion almost ended in a boxing match.

That is why “we are interested that in the coalition there is a debate, which has been our main strength, and we build on consensus and then unity behind the prevailing idea or proposal”, added Alejandro Sanchez.

However this does not damage or crack the government’s capacity to continue along the path of development and projects continue to arrive to the Executive and the Legislative with the signatures of all the ministers, insisted the Deputy.

Sanchez admitted that sometime differences surface but “this is not war, it is a discussion process inside the Broad Front and which will be approved by consensus”.

Last week pro-government publications denied that the Astori team was getting fed up of the in-fighting and was considering resigning.