Buenos Aires — In Federico Sturzenegger’s office, the details speak volumes: a Walter Isaacson biography of Elon Musk sits on a coffee table, while inside the main office, a drawing by cartoonist Nik ruthlessly tracks the time his ministry has left to reform the Argentine state without going through Congress. Among decorative figurines, one stands out: Javier Milei wielding a chainsaw.
On Friday, May 16, the counter marked 53 days until the Minister of Deregulation and State Transformation loses the powers delegated by parliament as part of the “Bases” Law, sanctioned in July 2024.
The minister confirmed in an interview with Bloomberg Línea that the government will not seek to renew these delegated powers and announced that the next 49 days will be "quite interesting" with decrees that will merge organizations, close others, and centralize entities that had grown in a decentralized manner. “The idea was always not to renew them, because I needed my team to be very aware of the time we had,” Sturzenegger explained.
In Sturzenegger’s vision, “destroying” the “legal castle” — a regulatory structure erected by the business leaders, politicians and unions, with Peronism as the central articulator — and then establishing a cycle of order and economic growth that benefits even those who supported the previous regime, represents the best path to forge a lasting political consensus in Argentina.
“To save industry we need to open the economy. Argentina will never have a successful industry globally if it doesn’t have a sufficiently open economy that allows its industrial producers to have the inputs they need to compete”.
Federico Sturzenegger
For the economist, this is how to ensure Milei’s government reforms endure over time, while achieving the institutional stability that characterizes neighbors like Peru, Chile and Uruguay, where left and right respect basic economic rules and guarantee their continuity. This approach, he suggests, will continue reducing country risk toward the levels of seen in those economies today.
Argentina’s country risk closed April at 722 points compared to 176 for Peru, 133 for Chile and 102 for Uruguay.
49 days to merge and close state agencies
The minister was categorical: there will be no extension of delegated powers. “I put these clocks here in my office so my team would be aware of what time means.”
During these final 49 days, the government plans a “profound reformulation of the state,” targeting in part “organizations with financial autonomy that had led to a proliferation of bureaucratic procedures.” “In the next 50 days you’re going to see quite significant movement,” he predicted.
The minister clarified that the powers delegated by Congress were more related to the “chainsaw” than to deregulation, allowing the elimination of state activities considered unnecessary even when their authority was originally established by law.
October elections will be key for continuity of reform agenda
For Sturzenegger, the level of electoral support in the legislative elections will be decisive in expanding the reform horizon: “Depending on the volume of votes we obtain, another window opens, which is the reformulation of laws for which we didn’t have delegated powers.”
With that potential increased parliamentary representation, he anticipates fundamental reforms — including labor, tax, pension, and economic opening — which, according to him, are essential for Argentina to make an "upgrade" of its productive structure and develop its potential. To drive these transformations, Sturzenegger insists that citizen support in local and legislative elections will be key.
“When inflation disappears from Argentina, and I think it will happen even sooner than people think, it will force us to reconsider all the rigidities our labor market has, and I believe this will require us, in Congress, to have a discussion."
Destroying the “caste’s” “legal castle”
The official developed his theory of Argentina’s “Bermuda triangle,” a trap built by different sectors: unions, part of the business community, and “the Peronist party, which I tend to interpret as Argentina’s conservative party, the party of vested interests.”
To definitively dismantle this structure, Sturzenegger outlined a dual strategy: “First, you have to destroy their legal castle, the legal architecture they built up” and second, financially weaken these interest groups.
As an example, he cited the elimination of intermediaries in social assistance implemented by Human Capital Minister Sandra Pettovello: “When the minister eliminated that intermediation, from one month to the next, the protests disappeared,” he emphasized.
“High public spending was the adjustment”
Sturzenegger defended the president’s strategy of dedicating time to “the cultural battle” to explain the need for fiscal balance. “Part of the task is explaining to Argentines that Kirchnerism was the adjustment, that high public spending was the adjustment,” he maintained.
When questioned about the administration’s lack of willingness to generate agreements with the opposition, the minister argued that political consensus is being built organically, not through party alliances but through popular support. This is demonstrated by a president who “adjusts five points of public spending” becoming more popular, he added.
Although in recent months the Government Confidence Index from Torcuato di Tella University has recorded declines, the average during the Milei administration remains higher than that registered by his four predecessors.
“What Javier says is: shrinking the state isn’t unpopular, it’s popular,” he affirmed.
Banning beef exports “was criminal”
Sturzenegger celebrated the deregulation of the beef and yerba mate industries. He explained that liberalizing meat exports was even beneficial for the domestic market because “the cuts consumed abroad aren’t exactly the same as those consumed domestically.”
“What [Former Interior Commerce Secretary Guillermo] Moreno did by prohibiting exports was truly criminal, and it ended up depleting our stock and making meat more expensive,” he criticized. The minister recalled that in the early 90s Argentine and Brazilian cattle herds weren’t so different, but Brazil grew several times more by not prohibiting exports.
Argentina recorded its highest volume of beef exports in 100 years in 2024, while its domestic price increased less than inflation: 80% compared to a general CPI of 118%.
Argentine yerba mate around the world
Regarding yerba mate, he highlighted the global potential of a product consumed by 96% of Argentine families. “Few industries have that capillarity,” he noted.
Additionally, he suggests that, now deregulated, the yerba mate sector could conquer the world with figures of international projection: “You have Franco Colapinto and Leo Messi drinking mate, [Antoine] Griezmann."
In regulatory matters, Sturzenegger recalls that decree DNU 70 proposed eliminating the National Institute of Yerba Mate (INYM), although in practice deregulation was achieved when “INYM stopped setting the price, and the price became free.”
“At the same time, we’ve eliminated restrictions on production” such as prohibitions on planting yerba mate fields. “A country was preventing itself from growing,” and “these are the distortions we need to eradicate,” he concluded.
Tierra del Fuego has life beyond manufacturing
Regarding the possibility of layoffs in Tierra del Fuego’s electronics industry after the elimination of protectionist tariffs, Sturzenegger downplayed the adverse impact, while highlighting benefits for the majority of Argentines. “We’re talking about 2,000 people, out of a workforce of six and a half million people,” he put in perspective.
According to data from the Government of Tierra del Fuego, the Fuegian industry, protected since 1972, employs approximately 8,000 people. The province’s total population is 185,000 individuals.
The minister argued that eliminating the special regime would create more jobs than it would destroy, because consumers will have more money available by paying less for electronic products. “The country as a whole will have much more employment,” he predicted.
Regarding Tierra del Fuego’s potential, Sturzenegger was optimistic: “There is no reason why in a few years it couldn’t have the income levels of a European country,” citing its gas reserves, as well as its fishing and tourism potential.
Argentina tourism prices “should decrease”
The official addressed the problem of high dollar prices for tourism in the country, especially in Patagonia, where walks on the Perito Moreno glacier were being sold in recent months for approximately US$400 per person. “A family of four has to take an afternoon tour. US$2,000? It makes absolutely no sense,” he criticized.
He explained that these prices were due to National Parks having granted monopolies to private companies, sharing the revenues. The government modified the national parks regime a month and a half ago, opening up tourism exploitation competitively. “We expect those prices should quickly decrease,” he anticipated.
Peso appreciation is “healthy” and for the right reasons
Regarding criticism from opponents and economists like Luciano Laspina about peso appreciation occurring faster than reforms and tax cuts, Sturzenegger defended the floating exchange scheme: “That’s the extraordinary thing about having a floating exchange rate: it’s the market telling you what the exchange rate is.”
The minister argued that Argentina is experiencing “a very genuine export shock” from Vaca Muerta’s energy complex and the future mining boom, which naturally tends to appreciate the currency. “It’s logical and healthy, it comes for the right reasons,” he defended.
“This isn’t appreciation perhaps produced by financial speculation, the famous carry trade or things like that.”
Companies that defaulted on bonds “bet on devaluation”
Regarding companies that have faced financial problems in 2025, including defaults on promissory notes and corporate bonds, Sturzenegger considered that they “have nothing to do with the macroeconomic environment, but with specific bets these companies made,” especially speculative positions expecting a devaluation that didn’t materialize.
“These companies in the agricultural sector basically apostaban when the appreciation occurred it was a problem,” but “they were speculative positions,” he added.
To save Argentine industry the economy must be opened
Sturzenegger defended greater openness to imports amid concerns about dumping. “In a floating exchange rate regime, each import generates its export,” he explained, arguing simultaneously that closing the economy only ends up discouraging exports.
The minister cited the example of Hong Kong, which exports and imports 140 points of GDP without employment problems, compared to Argentina that barely reaches 12-14 points. “To save industry we need to open the economy,” he maintained.
He highlighted the importance of openness for entrepreneurs to access world-class inputs: “Argentina will never have a successful industry globally if it doesn’t have a sufficiently open economy that allows its industrial producers to have the inputs they need to compete.”
The inspiration for Elon Musk’s DOGE
Although the former president of Argentina’s Central Bank says he never spoke directly with Elon Musk, he understands that discussions between Milei and the man behind Tesla about Argentina’s deregulation agenda might have inspired the creation of the Department of Government Efficiency (DOGE) in the United States.
“It’s clear that Musk had a fixation with deregulation, particularly for his SpaceX operations,” he noted. “I believe that from conversations with Javier, where he told him what we were doing in this Ministry, he connected with the possibility that government could drive that deregulation agenda.”
No news on Tesla, but Starlink advances
The minister highlighted Starlink’s entry, another Musk company, into the Argentine market after the liberation of satellite internet through DNU 70. “Argentina is an obvious country for Starlink, because it’s a country with very low density [population] and large expanses, so it’s not economical to lay fiber optic everywhere,” he explained.
“And more than Tesla, something that for me would be absolutely central, and that Elon Musk is working on” is “cellular satellite” technology, said Sturzenegger, adding: “That would also be extraordinary for Argentina, because today our cellular networks don’t have complete coverage of the national territory; so hopefully that will arrive very soon.”
Currently, Starlink “Direct-to-Cell” is only available in the United States and New Zealand.
