Argentine presidential aspirant Massa says would cut back state controls

Reuters News
Posted: Nov 26, 2014 3:21 PM

TIGRE, Argentina (Reuters) - Sergio Massa, a frontrunner in Argentina's presidential election next year, said on Wednesday he would ensure the independence of the central bank and modify laws that have ramped up the role of the state in the country's stagnating economy.

Massa, who heads the Front for Renewal party and would come third in a vote now according to the latest opinion polls, said heavy controls on private firms had stunted investment and forecast the economy would shrink by 2 percent this year.

Meanwhile, political opponents of the country's leftist president, Cristina Fernandez, who is constitutionally barred from a third term, say the central bank's autonomy has greatly diminished under her leadership.

"These are part of a set of policy measures designed to ... demonstrate that Argentina wants to grow its economy through private-sector investment," Massa told foreign media outlets in Tigre, a town on the northern outskirts of the capital.

In his most detailed comments on how he would shape policy if he won the Oct. 25 election, Massa underscored his credentials as more market-friendly than Fernandez, whose party he broke away from last year.

Banished from global capital markets and facing an acute shortage of hard currency, Fernandez's government has tightened trade and currency controls since defaulting on its debt in July to protect low foreign reserves and defend the ailing peso.

But those measures have stifled imports, forced businesses to delay investment plans and exacerbated a decline in industrial output.

Among the laws singled out for revision by Massa was the recently adopted Supply Law, which enables the government to set profit margins and confiscate merchandise from private companies judged to have raised prices unjustifiably.

Massa said he would eliminate export taxes on wheat and reduce duties levied on corn and sunflower shipments. He said he would gradually reduce the export tax on soybeans as volumes sold abroad increased.

Farmers estimate Argentina could raise soy, corn and wheat output by up to a fifth if the next president scraps export quotas and eases taxes.

Echoing the government position, Massa said Argentina needed to negotiate a debt deal with all investors who rejected bond swaps in the aftermath of its record 2001 default, not just those suing the country.

"It's an issue which needs a deal with everyone, not just those litigating, or those who are not," Massa said.

(Reporting by Richard Lough and Eliana Raszewski; Editing by Jonathan Oatis)