MercoPress. South Atlantic News Agency

Milei: Cabinet crisis, diplomatic clash with Colombia and Argentina “closer” to dollarization

Economy Minister Luis 'Toto' Caputo said the taxation chapter of the Omnibus Law bill was left for later and admitted he would be taking over Infrastructure after Ferraro's sacking

While Argentine President Javier Milei said Friday that his country was closer to dollarizing its economy, Minister Luis 'Toto' Caputo announced that the taxation part of the so-called Omnibus Law bill was being spared for a later date in a move to have the legislation passed as soon as possible to achieve a zero deficit. However, the Chief of State's plans clash with other conflicts within the cabinet and also in diplomatic matters.

Milei said in an interview with a Colombian outlet that the monetary base remained stable while the Central Bank kept bolstering its reserves for around a month.

“We practically did not expand the monetary base given how much the public sector is contracting and, however, we have purchased US$ 5 billion in just over a month. The monetary base in Argentina is US$ 7.5 billion, which means that we are very close to being able to dollarize,” explained Milei, who has a degree in economics.

“If we could clean up all remunerated liabilities, Argentina would already be in a position to dollarize with very little money and thus we would exterminate inflation. Dollarizing has to do with the currency in which it is settled. I always talked about currency competition and therefore they can make transactions in the currency they want,” he added. “Freedom is not negotiated,” he added.

Caputo gave a press conference Friday evening to announce that the Government had decided to withdraw the fiscal chapter from the Omnibus Law bill to soothe negotiations.

”The zero deficit goal will not be missed and the progress of the conversation with governors for the approval of the law will be facilitated,“ Caputo said.

He also insisted that the most important thing was that ”the structural part and complying with the zero deficit will allow us not to have inflation problems and to have sustained growth.“

”Crisis“ in the cabinet?

Caputo also confirmed that the Economy Ministry he heads would be taking over the various departments of the old Infrastructure Ministry which has been dissolved after the sacking of Minister Guillermo Ferraro due to untrustworthiness.

Foreign Minister Diana Mondino announced that move by President Milei earlier Friday. She also denied any ”crisis“ in the cabinet. ”There is no crisis, we continue working together. It is a matter of reduction of costs,“ she explained.

Diplomatic crisis with Colombia

Meanwhile, Bogotá's Foreign Ministry Friday summoned its ambassador in Buenos Aires for consultations after Milei said in the same TV interview that his Colombian colleague Gustavo Petro was a ”murderous communist.“

”The government of Colombia strongly rejects this statement, which attacks the honor of the president,“ the Colombian Foreign Ministry said in a statement.

”President Milei's words ignore and violate the deep ties of friendship, understanding, and cooperation,” between the two peoples, the document went on.

Milei has repeatedly spoken evil of world leaders such as Brazilian President Luiz Inácio Lula da Silva and Argentine-born Pope Francis among others.