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Argentine gov't vows change as rivals slam shake-up

Published 07/08/2009, 10:25 AM
Updated 07/08/2009, 10:48 AM
CSGN
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* President under pressure to change after poll defeat

* Opposition says Cabinet shake-up superficial

* Markets seen reacting negatively to reshuffle

By Helen Popper

BUENOS AIRES, July 8 (Reuters) - Argentina's government vowed on Wednesday to make changes after a heavy defeat in a mid-term vote, but opponents said a Cabinet shake-up was superficial and failed to address demands for a policy shift.

President Cristina Fernandez replaced her Cabinet chief and economy minister late on Tuesday as the opposition piled pressure on her to acknowledge voters' rejection of her combative style and economic policies by charting a new course.

"If the electorate voted in a certain way, clearly they're asking for changes to some policies and we have to be wise enough to understand them and make the changes," said Anibal Fernandez, the justice minister who was named Cabinet chief.

Opponents said the reshuffle was window-dressing and financial markets were expected to react negatively to the shake-up, which also brought in Amado Boudou, head of the pension's agency, as the new economy minister.

They want to see the replacement of more controversial figures like Domestic Commerce Secretary Guillermo Moreno, who is accused of massaging economic data for political gain and is the chief enforcer of unorthodox anti-inflation policies.

"This is just make-up. What the government needs to do is ... stop manipulating data at INDEC (national statistics agency) and appoint an autonomous economy minister," said Gerardo Morales, head of the opposition Radical party.

Francisco de Narvaez, who defeated Fernandez's husband, former President Nestor Kirchner, in a congressional race in Buenos Aires province, said "drastic changes" were needed.

"We need a change of policies, not just different faces," he said, adding that Kirchner, widely seen as co-running the administration, should leave his wife's government.

Economic analysts said they saw big changes in policy as a result of the reshuffle, and markets were expected to greet it skeptically. The peso slipped slightly against the dollar in early, interbank trade, and stocks fell.

"The market reaction to this news is likely to be negative given that the expectation that, after its defeat in the election, the government might be more willing to negotiate ... Instead, the cabinet changes shows the Kirchners closing ranks," Carola Sandy of Credit Suisse wrote in a report.

Other analysts said the new appointments would not make much difference.

"This doesn't imply any real change in policy direction and is likely to be greeted with some disappointment," RBC Capital Markets said in a briefing note. (With additional reporting by Lucas Bergman, editing by Alan Elsner)

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