MercoPress. South Atlantic News Agency

Argentina is the most protectionist country of the region” claims Astori

His attitude towards Argentina has been described as 'negative' by junior officials who respond to President Mujica

Uruguay's vice-president Danilo Astori said that Argentina is “the most protectionist country in the region” and again questioned the effectiveness of Mercosur arguing that Uruguay can't forget the region but can't be expected to remain idle.

 “In life you must make choices and Uruguay needs to make all the possible agreements with countries and blocks outside the region. Uruguay can't forget the region but can't remain idle and perish in the region”, said Astori who has been consistently critical of Argentina and the Kirchner presidential couple economic and trade policies.

“We're about to conclude a trade agreement of Mercosur with the European Union, which even Argentina, the protectionist member of the group supports. The Pacific Alliance is another excellent platform, Mercosur can't become an end station, it has to be a launching platform to keep advancing”, added Astori who has had a more confrontation attitude towards Argentina compared to President Jose Mujica's seduction and patience policy.

Astori has blasted Argentina for the devaluation of the currency, protectionist policies, banning Argentine cargo from trans-shipment in Uruguayan ports, differences over the dredging of Rive Plate access canals, among other issues.

The vice-president criticism has been countered by junior officers responding to President Mujica arguing that his 'negative' attitude towards Argentina and president Cristina Fernandez was making 'things even more difficult”.

This forced a split in the economic team of the current Mujica administration, with those more orthodox under Astori remaining in control of the Ministry and Central bank, while those with a more profligate approach ended as Mujica's advisors and dominating the Planning and Budget office.

But Astori who was Economy minister with the administration of former president Tabare Vázquez, (2005/2010), and who apparently will be holding the same position if the now presidential hopeful is again re-elected next October, made a positive review of the ten years of the ruling catch-all coalition.

“We managed a significant growth of the economy in these ten years, but mainly because the genuine growth factor was the increase in investment, not domestic consumption, which can end backfiring. The true growth factors have been gross domestic investment in first place and exports in second place”, said Astori.

The vice-president also anticipated that a new coalition government would not need to make any fiscal tightening (as claimed by the opposition because of the successive budget deficits) because the “current situation is well balanced and sustainable; read my lips there won't be any fiscal surprises”.

Obviously “this does not mean we don't have to be cautious with spending and keeping a good macroeconomic stability; we've had it so far and we plan to continue on that path in the future”.

Furthermore “our fiscal policy will be to gradually eliminate taxes, overall, because those who can pay more, will have to pay more, and those who have less, will pay less”

The tax reduction objective is to benefit those most needed because the policy was designed on three pillars: first of all equality, you pay according to your capacity; efficiency in second place, we had 25/26 different taxes and we cut 15 off in one blow, since it makes fiscal administration cumbersome, heavy, wasteful, and finally streamlining tax collection including rights for taxpayers.

Astori also defined the financial situation of Uruguay as “very good”, which means not only that Uruguay has plenty of international reserves (17 billion), the highest in the country's history, but also even as important: fluid access to global money markets. You can't assess a financial situation without this market access element. Uruguay is reliable, honors debts and keeps to the rules“.

Finally on inflation the weak point of these ten years, mainly because of a consistent budget deficit, despite a decade of sustained growth, Astori said ”we are at 9% currently (the third highest in the region behind Venezuela and Argentina), but our goal is the roof of our target, 7%, and according to the last three months readings, the index is falling”.