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Seeking to eliminate the autonomy of the BCRA to align it with the government
El Cronista
February 02, 2010

The government is confident DNU on the Bicentennial Fund will be ratified and says the next battle will be over the reform over the Charter, with the backing of the center-left

ESTEBAN RAFELE Buenos Aires

Once the government manages to ratify in one of the two houses of Congress the Decree of Necessity and Urgency (DNU) that made available the use of part of the reserves to pay debt maturities in 2010, it will then try to reform the Charter of the Central Bank (BCRA) to limit its autonomy and add the entity to the economic policies decided by the Executive Branch.

Yesterday, the president of the block of deputies from the Frente para la Victoria (FPV), Agust n Rossi, said: "I am sure that in the framework of the debate on the Bicentennial Fund, the issue of reforming the dynamic of the Charter of the BCRA is something that will come out." Rossi denied that there was a concrete bill written, but the deputy from Buenos Aires of the Nuevo Encuentro block, Carlos Heller, ex-presidente of Credicoop bank and an ally of the government, told El Cronista that he's working on a bill to remove the last vestiges of the policies of the Washington Consensus that the country implemented in the 1990s.

"This underlying idea that the BCRA is an independent state actor within the state seems unserious to me. We have to find a reasonably balanced law where the BCRA has responsibility for monetary policy, exchange rates, etcetera, but also the obligation to coordinate policy with the rest of the public policies," Heller said, who is now studying the experience in Brazil, where a monetary council acts under the direction of the President and is made up of the Economy Minister and other officials and the BCRA "with those directors, executes policy with autonomy."

Kirchner's nod

Heller met with Deputy Nestor Kirchner in December to discuss the banker's bill to reform the law on Financial Entities, which has been in effect since the last dictatorship. Heller says that, since then, he's not covered the matter with the ex-president. "I put it on the table with a very leafy work about the history of the Argentine financial system, we ended with him planning to look at it," he argued.

But Kirchner came out in favor of discussing the autonomy of the BCRA and cited the banker, with whom he said he'd been "taking about that issue" in a report published by Pagina/12 in January. Kirchner also mentioned the head of Banco Nacion, Mercedes Marc del Pont, who'd introduced a bill in 2007 when she was a deputy.

The bill by the official wanted to modify Article III of the Charter for which the organization had as a "mission" to preserve the value of the currency "in a manner consistent with the policies set to sustain a high level of activity and to assure the highest deployment of available resources and materials." But it was back-burnered by the government block, despite having gotten the backing of the House Finance Committee. In that vote, only Federico Pinedo of Macri's PRO voted in favor of preserving the autonomy of the BCRA.

Now, the reform would go further. It would also include the possibility of introducing changes in the instruments that the Central Bank possesses to direct resources toward production. That's to say, it would give the government more chances to finance the expansion of public spending and the ever-postponed credit to the productive sector.

That is being pushed by the center-left. Deputy Claudio Lozano of the Proyecto Sur block recalled that he strongly proposed to employ reserves to finance infrastructure projects and said he'd support a bill of that caliber, while not the Bicentennial Fund. "We are not going along with a Fund to pay public debt that has not been reviewed," he said.

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