The national government is set to reject the approval for the new debt sought by the administration of Buenos Aires Province Governor Axel Kicillof, which was approved last week in a controversial session of the provincial legislature. Sources from the Casa Rosada have indicated to the Argentine News Agency that while the validation of the new debt would be rejected, the government would accept the rollover (refinancing) of the debt the province already has. The Approved Borrowing In the early hours of last Thursday, the Kicillof administration achieved legislative approval to request a loan of up to 3,685 million dollars. Furthermore, Kicillof did not participate in the meetings the Nation held with 20 governors in recent weeks. In response, the Minister of the Buenos Aires Government, Carlos 'Carli' Bianco, requested a meeting with the Minister of the Interior, Diego Santilli, through an official letter. The objective is 'to demand the funds that the national government took away from the people of Buenos Aires and to resume the execution of the 1,000 works left abandoned'. Santilli acknowledged receipt of the note via the social network X, although no progress has been reported to date. The national government's rejection position is based on the 2004 Fiscal Responsibility Law. Minister of Economy Luis Caputo stated this Saturday that the law stipulates that provinces must not take on new debt if 'current spending exceeds inflation'. According to the official, Buenos Aires is 'not complying' by increasing current spending above inflation, so the new debt 'should not be subject to approval'. In line with this, the Chief of Cabinet, Manuel Adorni, ratified the stance this Tuesday during the presentation of the final report of the Council of May. Adorni pointed out that the Council proposes 'to publicly reinforce the commitment not to request borrowing authorizations if a province has a primary deficit, of course, except for debt roll-overs'. Previously, the Undersecretary of Political Affairs, Sebastián Pareja, had already anticipated that the national government would not validate Kicillof's debt approval. This amount includes the issuance of Treasury Bills and four specific borrowing operations: one for the central administration, another for the Executive, a third for the company AUBASA, and one for Buenos Aires Energía. For this measure to be implemented, the province needs the Nation's approval, a permission that has recently been granted to jurisdictions such as the City of Buenos Aires, Córdoba, and Santa Fe to access the international market. The underlying political tension The relationship between the Casa Rosada and the Buenos Aires provincial government is notably different from the one it maintains with other provinces. Buenos Aires is one of the four jurisdictions that did not sign the May Pact (along with La Rioja, Tierra del Fuego, and Formosa).
