BUENOS AIRES _ Argentina's Treasury Minister Nicolas Dujovne resigned on Saturday, days after President Mauricio Macri suffered a heavy setback in primary elections sending the peso into a nose drive.

In a letter to Macri published by newspaper Clarin, Dujovne said "circumstances" required a "significant renewal in the economic area."

Dujovne, who took the post in 2017 and led bailout negotiations with the International Monetary Fund last year, said that much was accomplished in terms of taming the deficit and trimming public spending, but "without a doubt mistakes were made."

According to Clarin, Dujovne will be replaced by Buenos Aires province Economy Minister Hernan Lacunza.

The minister's resignation comes three days after Macri announced a package of tax cuts and other economic relief measures for workers and companies following a surprise defeat in primaries on Sunday.

Macri took only 32% of the vote, against nearly 48% for opposition candidate Alberto Fernandez. The primaries, which whittled down the number of presidential candidates, were considered an important indicator of public opinion before the presidential elections on Oct. 27.

The defeat, attributed largely to Macri's austerity policies and Argentina's economic difficulties, sent the peso into a nose drive amid fears among investors that a Fernandez presidency could see protectionist policies implemented.

The South American country is in a recession, urban poverty remains high, inflation is running in the double digits and unemployment stood at 10% in the first quarter.

PHOTO (for help with images, contact 312-222-4194):ARGENTINA-TREASURY-RESIGN </s> FILE - In this April 17, 2019 file photo, Argentina's Treasury Minister Nicolas Dujovne speaks during a press conference at Quinta de Olivos, in greater Buenos Aires, Argentina. Dujovne announced on Saturday, Aug. 17, that he is quitting his post in the government of President Mauricio Macri. (AP Photo/Natacha Pisarenko, File)

BUENOS AIRES, Argentina (AP) — Argentina's treasury minister, Nicolás Dujovne, resigned Saturday and will be replaced by the economy minister of the country's most populous state, a senior official in the presidential office said.

The resignation came three days after President Nicolas Macri announced his conservative administration is temporarily increasing the minimum wage, reducing payroll taxes and implementing other steps to help Argentine workers as the country struggles to overcome sizzling inflation, high unemployment and other economic problems.

Macri acted after a leftist presidential slate that includes his predecessor, Cristina Fernández, turned in a powerful showing last Sunday in primary voting for candidates going into October general elections. Macri's slate did poorly, and the already weak Argentine peso slumped and stock prices fell sharply as investors reacted in worry about the vote results.

In his resignation letter, Dujovne reportedly says the government needs to make "a significant overhaul in the economic area." He says the administration made strides in reducing the government's deficit and reducing taxes, but adds that "we undoubtedly made mistakes."

The presidency official, who agreed to confirm the resignation only if not quoted by name, said Dujovne would be replaced by Hernán Lacunza, the economy minister for Buenos Aires province. Lacunza previously was general manager of the Central Bank. </s> BUENOS AIRES, Argentina — Argentina's treasury minister, Nicolas Dujovne, resigned Saturday and will be replaced by the economy minister of the country's most populous state, a senior official in the presidential office said. 

 

 The resignation came three days after President Mauricio Macri announced his conservative administration was temporarily increasing the minimum wage, reducing payroll taxes and implementing other steps to help Argentine workers as the country struggles to overcome sizzling inflation, high unemployment and other economic problems. 

 

 Macri acted after a leftist presidential slate that includes his predecessor, Cristina Fernandez, turned in a powerful showing last Sunday in primary voting for candidates going into October general elections. Macri's slate did poorly, and the already weak Argentine peso slumped and stock prices fell sharply as investors worried about the vote results. 

 

 In his resignation letter, Dujovne reportedly said the government needed to make ``a significant overhaul in the economic area.'' He said the administration had made strides in reducing the government's deficit and reducing taxes, but added that ``we undoubtedly made mistakes.'' 

 

 The presidency official, who agreed to confirm the resignation only if not quoted by name, said Dujovne would be replaced by Hernan Lacunza, the economy minister for Buenos Aires province. Lacunza previously was general manager of the Central Bank. </s> BUENOS AIRES (Reuters) - Argentina’s Treasury Minister Nicolas Dujovne has resigned, saying in a letter seen by Reuters on Saturday he believed the government needed “significant renewal” in its economic team amid a crisis which saw the peso plunge this week.

Dujovne said in a letter to Argentine President Mauricio Macri that he had given his all to the job, helped tame a significant deficit and trim public spending but conceded: “Mistakes have been made, without a doubt.”

“I believe my resignation is in keeping with my place in a government... that listens to the people and acts accordingly,” he added.

Macri has appointed Hernan Lacunza , the current economy minister for Buenos Aires province, as Dujovne’s replacement, a government source told Reuters. </s> Argentina’s Treasury Minister Nicolas Dujovne has resigned, saying in a letter seen by Reuters on Aug. 17 he believed the government needed “significant renewal” in its economic team amid a crisis which saw the peso plunge this week.

Dujovne said in a letter to Argentine President Mauricio Macri that he had given his “all” to the job, helped tame a significant deficit and trim public spending.

“We have made mistakes as well, without a doubt, we never hesitate to recognize that and did all that was possible to correct them,” he added.

“I believe my resignation is in keeping with my place in a government that listens to the people and acts accordingly,” he added.

Macri has appointed Hernan Lacunza, the current economy minister for Buenos Aires province, as Dujovne’s replacement, a government source told Reuters.

Argentina’s peso was in free-fall for most of this week after a shock primary election result last weekend, when center-left Peronist candidate Alberto Fernandez trounced center-right Macri, in what was widely seen as a referendum on the government’s seeking of a loan from the International Monetary Fund (IMF) and austerity measures it took as a condition for the loan.

The peso depreciated 21 percent by the end of the week and on Aug. 16, in a fresh blow to Macri, ratings agencies Fitch and SP downgraded Argentina’s sovereign debt rating, raising the specter of a default as the October election approaches.

Lacunza is the former general manager of Argentina’s Central Bank and also of the Buenos Aires City Bank. </s> Argentina’s Treasury Minister Nicolas Dujovne has resigned, saying in a letter seen by Reuters on Saturday he believed the government needed “significant renewal” in its economic team amid a crisis which saw the peso plunge this week.

BUENOS AIRES: Argentina’s Treasury Minister Nicolas Dujovne has resigned, saying in a letter seen by Reuters on Saturday he believed the government needed “significant renewal” in its economic team amid a crisis which saw the peso plunge this week.

Dujovne said in a letter to Argentine President Mauricio Macri that he had given his all to the job, helped tame a significant deficit and trim public spending but conceded: “Mistakes have been made, without a doubt.”

“I believe my resignation is in keeping with my place in a government... that listens to the people and acts accordingly,” he added.

Macri has appointed Hernan Lacunza , the current economy minister for Buenos Aires province, as Dujovne’s replacement, a government source told Reuters. </s> The economy minister for the province of Buenos Aires is set to become Argentina's treasury minister following the resignation of Nicolas Dujovne, government sources told EFE on Saturday.

The move comes after Dujovne presented his resignation in a letter to President Mauricio Macri following a financial crisis in the Argentinian market last week — an adverse reaction from investors to the ruling party's defeat in the presidential primaries on Aug. 11. </s> In a letter, cited by Reuters, Dujovne said that the country's government needed “significant renewal” in its economic team amid a currency crisis.

“I believe my resignation is in keeping with my place in a government... that listens to the people and acts accordingly,” Dujovne said in the letter to Argentine President Mauricio Macri.

The country's president has appointed Hernan Lacunza, the economy minister for Buenos Aires province and former general manage of the Central Bank, as Dujovne’s replacement, according to AP.

Earlier in the day, Fitch Ratings announced in a press release that Argentina’s credit rating had been downgraded due to increased political risks driven by the recent electoral defeat of the country’s incumbent president.

Incumbent President Mauricio Macri won only 32.1 percent of the vote against his challenger Alberto Fernandez’s 47.7 percent in last Sunday’s election.

The primary elections results prompted a sharp drop in peso rate and an increase in economic instability. </s> (Bloomberg Opinion) -- Monday’s panic over Argentina’s weekend election results — the peso fell 15% and the S&P Merval stock index suffered its second worst rout in 70 years — may have been a bit overwrought. It was a primary election, after all, and the winning opposition candidate, Alberto Fernandez, has denied any intention to default on Argentina’s debt. But it sends an important message to Fernandez, and his running mate, former President Cristina Fernandez de Kirchner: Before the October election, they must convince stakeholders in Argentina’s economy that they understand the need to carry on with incumbent President Mauricio Macri’s economic reforms, if by another name.

Fernandez’s win was such a landslide, it sparked fears of a return to debt default, uncontrolled inflation and frenzied selloffs, precisely the sort of trouble that Argentines thought they had left behind. But the new market mess is a panic foretold.

Argentina’s leaders have been fatally misreading economic cues for decades. Misguided austerity and a flawed tether to the U.S. dollar in the late 1990s set off a currency collapse, riots, a run on banks, four presidents unseated in one 10-day stretch and, by 2002, the world’s largest sovereign debt default.

That debacle laid ground for the next. The Peronist tag team of Nestor Kirchner (2003-2007) and his wife and successor Cristina Fernandez (2007-2015) vowed to reclaim the country from predatory creditors, and briefly revived growth — before going on to squander the global commodities boom and turn South America’s second biggest economy into one of its most dysfunctional markets.

That wreckage helped propel Macri into office in 2015, on his market-friendly promise to restore Argentina to economic normalcy and the international community’s good graces. And he kept his word. Macri mended relations with global lenders, secured a rescue package from the International Monetary Fund, allowed the peso to float and belatedly engaged in the kind of fiscal probity that his populist predecessors had scorned. Yet his structural reforms were hesitant. And he faced a record drought that punished Argentina’s competitive farm sector, as well as a global selloff of emerging market assets. So he failed to deliver growth, jobs or stable prices — much less persuade voters to give him a second chance.

Credit the Peronists for spinning Macri’s grief into electoral gold. Barring an unlikely comeback — Eurasia Group rates Macri’s reelection prospects at just 10% — Fernandez is likely to be elected president in October, or in a runoff in December.

Yet here’s the irony: Macri may have moved too slowly and diffidently to put Argentina’s public accounts fully in order, but his policies are beginning to coax the country in the right direction. Whoever moves into the Casa Rosada in December will find little alternative but to carry them through.

Fernandez must now be clear that he understands that any return to government economic controls and protectionism would be folly. Yesterday, he said Argentina needs to rework its economic model, but didn’t explain how. He’ll have to do better than that. As Alberto Ramos of Goldman Sachs put it, “Fernandez not only needs to say the right things, but to convince people he means them, or else the markets will start to second guess him.”

To boost his credibility, Fernandez could name someone with a track record in finance to reach out to creditors and the IMF, clearly signaling his commitment to follow through with the fiscal consolidation Macri has put in motion. Leave it to the ecumenical Peronists to work those free-market principles into the populist gospel of reform.

Such efforts may still fall flat unless Fernandez, who has never run for national office, also shows what sort of leader he means to be. Can voters expect the pragmatist and conciliator he was when he broke ranks with the confrontational Cristina in 2008? Or will they be left with a mouthpiece for the mercurial Peronist power broker, bent on ruling by proxy and spending money Argentina doesn’t have?

The mayhem in the markets is a cautionary tale. Unless Fernandez can shed his slate’s populist legacy and deepen his rival’s policy agenda, he will stumble. After a decade of economic chaos brought on by willful politicians, the last thing Argentines need is another tone-deaf leader.

To contact the author of this story: Mac Margolis at mmargolis14@bloomberg.net

To contact the editor responsible for this story: Mary Duenwald at mduenwald@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mac Margolis is a Bloomberg Opinion columnist covering Latin and South America. He was a reporter for Newsweek and is the author of “The Last New World: The Conquest of the Amazon Frontier.”
The Argentinian Treasury Minister, Nicolás Dujovne, resigns after incumbent President Mauricio Macri's loss in a primary vote saw Argentina's peso fall to record lows.