Argentina’s Minister of Economy, Luis Caputo, announced Saturday the addition of former Uruguayan presidential candidate and Foreign Minister Ernesto Talvi as an advisor to his team at the Palacio de Hacienda. The appointment comes as Argentina continues to grapple with economic recovery and high inflation.
“Very happy to announce that Ernesto Talvi, an economist with extensive experience and reputation, has joined our economic team,” Caputo said in a post on X. “His experience and vision will be a great contribution to further consolidating the recovery of the Argentine economy.”
José Luis Daza, Caputo’s second-in-command, echoed the sentiment, celebrating the latest addition and highlighting Talvi’s career as an “academic, policymaker and researcher in international organizations.”
President Javier Milei also shared Caputo’s message, expressing his enthusiasm with the phrase “TMAP. ¡VLLC!” – an allusion to the popular phrase “Todo Marcha de Acuerdo al Plan” (“Everything is Going According to Plan”), frequently used by the president and his supporters.
Talvi’s political career centered around a run for the Uruguayan presidency between 2018 and 2020. He won his party’s primary but ultimately lost the general election to Luis Lacalle Pou. Though offered a seat in the Senate, Talvi instead served as Uruguay’s Foreign Minister from 2020 until he resigned after just three months, stating he was leaving “definitively active politics.” At the time, he said, “I have decided to leave active politics definitively, resign from the Senate, not hold any public office and not run for any elected office in the future.”
Following his departure from government, Talvi moved to Spain and became a principal researcher at the Real Instituto El Cano de Madrid, a think tank focused on international strategic analysis.
A Doctor of Economics from the University of Chicago, Talvi previously served as head of the Central Bank of Uruguay during the stabilization plan of the 1990s and as director of the Initiative for Latin America at the Brookings Institution in Washington.
In a November interview with LA NACION, Talvi drew parallels between Uruguay’s anti-inflationary process in the 1990s and the current situation in Argentina, noting an “incredible” similarity between the two countries.
Talvi pointed out that Uruguay had inherited a fiscal deficit of 7% of GDP, although Argentina faced a 5% deficit in December 2023. He also noted that Uruguay’s inflation rate was in the triple digits, around 130%, and that the country also lacked liquid international reserves and access to international credit. “The economy was stagnant. We were, and still are, an economy where the dollar is king,” he said.
He urged Argentina to exercise the same “strategic patience” that Uruguay demonstrated during its stabilization process. “Trying to speed up the process with inflation often involves very high interest rates, a very appreciated exchange rate, more than reasonably occurs in all these processes. And rushing conspires against the sustainability of the plan. Because if you pay interest rates that are not just high but prohibitive, you are shooting yourself in the foot because it is impossible to restore credibility to the fiscal path when you are paying leonine interest rates,” the economist cautioned.
“And if those interests artificially maintain the dollar down and depress the productive sector, the plan cannot work,” he added.
Talvi was also critical of President Milei’s administration prior to October’s legislative elections, arguing that the president had “dynamited” the political coalition that had supported his economic plan. However, he later praised the outcome of the midterm elections, which he said created an “opportunity” to restore political alliances and, confidence in the markets and the sustainability of the economic program.
“I believe the President is on his way to doing so, and therefore to redirecting a program that, beyond the rescue of Bessent, was not mortally damaged before all this dissolution of the political coalition that supported it,” Talvi said in an interview with Luciana Vázquez in late November.
Those statements were made before the government approved its first budget in December and before the extraordinary sessions of Congress, during which the ruling party passed labor reform, amended the juvenile criminal code, and ratified the Mercosur-European Union agreement, as well as advanced the glacier law, which has now been sent to the Chamber of Deputies.
Talvi’s appointment follows a week of changes in the cabinet, including the addition of Juan Bautista Mahiques as Minister of Justice, replacing Mariano Cúneo Libarona, and the arrival of Santiago Viola, aligned with the libertarian movement, as the deputy minister, leading to the departure of Santiago Amerio, an advisor to Santiago Caputo.
Hours after being sworn in as Minister of Justice at the Casa Rosada, Mahiques announced several changes to his ministry’s structure, including a request for the resignation of the head of the IGJ, Daniel Vítolo, who had been the face of the government’s efforts to scrutinize the AFA (Argentine Football Association) and had proposed incorporating observers into the organization led by Tapia.
He also decided to replace the heads of the Financial Information Unit (UIF), the Anti-Corruption Office (OA), and the Secretary of Human Rights. Regarding the new appointments, the minister announced Alejandro Ramírez as Vítolo’s replacement, describing him as a man of his “trust,” a graduate of the Universidad Austral, “prepared and qualified” to lead the IGJ.
Rumors have also circulated regarding the possibility of Daza leaving the Palacio de Hacienda to join the cabinet of Chilean President-elect José Antonio Kast. However, figures within the economic team have dismissed these claims on social media.
