In her first full week in office, Economy Minister Silvina Batakis gave prominence to energy sector affairs, even though she faces a challenging macroeconomic scenario that is pointing toward a possible devaluation of the peso. Batakis took charge of the Economy Ministry on 4 July, following the sudden resignation of Martin Guzman, who had been under fire from follower of Vice President Cristina Kirchner. According to press reports, Guzman had asked President Alberto Fernandez for full control of two sensitive areas of the economic administration: the central bank and the Energy Secretariat. After Fernandez failed to deliver, Guzman decided to step down.  

While the central bank is led by a figure close to Fernandez, the Energy Secretariat is under the control of Kirchner followers. As she assembled her team following the resignation of Guzman and his collaborators, Batakis confirmed Energy Secretary Dario Martinez and Electricity Undersecretary Federico Basualdo in their positions. The pair had resisted Guzman’s scheme to withdraw energy subsidies from consumers who can pay the full rate. In our assessment, Batakis lacked the political power to replace the pro-Kirchner members of her cabinet even if she wanted to, as Guzman’s exit was a political victory for the vice president. The new minister did appoint three people in the secretariats where Guzman’s aides had tendered resignations: Martin Di Bella (see our Personality of the Week) as treasury secretary, Martin Pollera as domestic trade secretary and Eduardo Setti as finance secretary. 

 In her first days in office, Batakis made it clear that energy issues will be high on her agenda, even though she is not an energy expert and lacks experts in her closest team. On 6 July, she confirmed that she wants to move ahead with the means-tested system to allocate gas and electricity rate subsidies, which had been an issue of contention between Guzman and the Kirchner supporters. However, Horizon contacts in the Energy Secretariat indicate that Guzman’s plan will be thrown away and traded for a scheme designed late last year by Basualdo and his team. Instead of allocating subsidies according to household income, Basualdo’s plan would establish a geographical criterion, wherein the richest neighborhood of the Buenos Aires Metropolitan Area would pay full bills regardless of their individual income. The final fine print of how it would work has yet to be settled. 


  • In her first full week in office, Economy Minister Silvina Batakis gave prominence to the energy agenda despite facing a run on the peso.
  • That said, Batakis lacked the political strength to replace officials in the Energy Secretariat who technically report to her but politically answer to Vice President Cristina Kirchner.
  • These empowered officials had forced out her predecessor, Martin Guzman, and will likely continue to block a means-tested system to allocate energy subsidies among consumers. However, we expect them to push for speedier construction of the Vaca Muerta gas pipeline.

Meanwhile, on 8 July, Batakis participated in opening the proposals that had been received in the tender to build the Nestor Kirchner pipeline, which will bring Vaca Muerta gas to the country’s urban and manufacturing center. She joined the leadership of the Energia Argentina state entity to announce that five companies had applied to build the pipeline, which the government wants operational by June 2023. Energia Argentina is run by Agustin Gerez, a figure who is also close to Kirchner. 

These two signals by Batakis are an indication that energy will remain high on her list of priorities. Her first week was dominated by a run on the peso that triggered a surge in the black market exchange rate of pesos per dollar and fueled expectations of a looming devaluation. Batakis struggled to assemble a team but finally did so on 9 July, Argentina’s Independence Day. She then held weekend gatherings to discuss her first measures. These were announced on 11 July, with a focus on curbing the fiscal deficit to comply with the IMF agreement that had been signed in March and thereby soothe markets. 

In our assessment, Batakis’ first moves on energy issues hint that Kirchner followers will be empowered in the portfolio. This means that we might not see an immediate materialization of the means-tested system of subsidies as masterminded by Guzman – and therefore no reduction of overall subsidy spending as demanded by the IMF. On the other hand, the Vaca Muerta gas pipeline construction will move forward, with the administration hoping that the works will have significantly advanced by the October 2023 presidential election. 

personality of the week

Martin Di Bella

Treasury Secretary Born in 1967 in the town of Caleta Olivia in Santa Cruz province, Di Bella moved to the city of La Plata at a young age with his family. He studied economics at the local university, the same attended by his boss, Economy Minister Silvina Batakis, as well as her predecessor, Martin Guzman. 

Di Bella knows Batakis since they were both on the economic team of then Buenos Aires Governor Daniel Scioli between 2011 and 2015. Batakis was Scioli’s economy minister while Di Bella led the ARBA provincial tax collection bureau. 

Now Di Bella has the tough challenge of managing the budget, which requires a deficit reduction as part of the agreement that the country signed with the IMF in March 2022. He and his boss Batakis will face pressure from the left-leaning faction of the ruling coalition to increase spending to avert what seems like a very probable defeat for the ruling Frente de Todos coalition in the October 2023 presidential election 

More recently, Di Bella was administration secretary in the Buenos Aires provincial Senate. Prior to that, for three years he managed the finances of the soccer team that he personally roots for, Estudiantes de La Plata; this followed an invitation from club chairman Juan Sebastian Veron, a former Argentine international midfielder. 

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