Macri risks political future with harsh austerity measures
Argentina’s President Mauricio Macri announced the implementation of a series of severe economic measures this week in a bid to restore market confidence in the ailing peso and credibility in his administration. By decisively turning his back on economic gradualism in a bid to eradicate the fiscal deficit, reneging on his promise not to raise taxes and cut spending, Macri has taken a big political gamble. It will scupper his chances of re- election in October next year if it fails to pay off. The markets are yet to be convinced. A revised deal with the International Monetary Fund (IMF) and an accord with the political opposition over the 2019 budget could change that, but even then market satisfaction could be short-lived. The concern for Macri is that in the process he could earn the lasting enmity of a public whose patience is expiring as rapidly as the currency’s value.