Federico Sturzenegger Joins Milei's Government as Minister of Deregulation

The appointment of Federico Sturzenegger as the new deregulation minister is expected to usher in another phase of liberal reforms in Argentina. But Sturzenegger must hurry to use the special powers granted to Milei by Congress in time before the political winds in the country change again.

Federico Sturzenegger, former central bank governor under Mauricio Macri, was sworn in by President Javier Milei as head of Argentina's newly created Ministry of Deregulation and State Transformation. This ministry is tasked with reducing regulatory burdens and transforming state operations to reduce public spending.

Since the beginning of President Milei's government, Sturzenegger has been the mastermind behind the comprehensive reform projects that found expression in the Emergency Decree 70/2023 to deregulate the economy and the recently approved "Ley Bases" reform package.

Sturzenegger's new role follows a turbulent career that has oscillated between academic theory and practical policy. During his previous tenure as central bank chief, he lifted currency controls, tried with little success to introduce modern inflation targeting in Argentina, and faced political infighting that ultimately led to his resignation in 2018.

Now, under Milei, Sturzenegger is expected to oversee more than 3,000 reforms aimed at streamlining Argentina's heavily regulated economy. The move is seen as crucial to Milei's agenda of boosting private sector growth and deregulating the economy.

Sturzenegger's experience in dealing with financial turmoil and implementing reforms will be put to the test as he works to reduce bureaucratic obstacles and promote economic efficiency. His ability to balance visionary deregulation with the pragmatic needs of Argentina's complex economic landscape will be critical to the success of these ambitious reforms.

Despite past failures, Sturzenegger remains as highly motivated and optimistic as ever. He explains: “Argentina is a little bit overloaded with laws and regulations, and the president has tasked me with taking that burden off the productive sector.” In his new role, Sturzenegger’s success will depend on his ability to work effectively with other key figures in the government, especially given his past with current Economy Minister Luis Caputo. The dynamics between their ministries could be crucial to implementing Milei’s economic vision.

Indeed, just days after a hard-fought major victory in parliament, the Milei government appears to be experiencing some decay. Memories of the Macri government’s negative turn in late 2017 are coming back. At the time, the Macri government had just pushed a highly controversial pension reform through parliament and withstood fierce protests in the streets when then Economy and Finance Ministers Nicolas Duijovne and Luis Caputo launched a coup against then-Central Bank chief Sturzenegger with the aim of loosening monetary policy and thus stimulating the economy. Duijovne and Caputo failed miserably, while Sturzenegger returned to academia once again. Now he's back to the game of politics. Let's see how far he gets this time.

Carl Moses