Guillermo Francos: We suffered a blow, Milei took charge, and no more cabinet changes are needed.

Chief of Staff Guillermo Francos admitted that the electoral defeat in the province of Buenos Aires was " a blow " and at the same time one of the "worst" moments of Javier Milei's administration since taking office. However, he emphasized that the President had taken the lead in the "moment of crisis."

During an interview with Clarín in his office at the Casa Rosada, Francos expressed optimism about resolving the internal dispute within the ruling party and the outcome of the October elections. He asserted that Governor Axel Kicillof's request for Milei to change her policy—in another report in this newspaper— means the state is spending more than it earns.

He also confirmed that they will enact the Disability Emergency Law after Congress's ratification, although he clarified that the opposition must decide where the funding for its implementation will come from . And referring to the Diego Spagnuolo audio recording scandal , he admitted that it was the greatest damage the Milei administration has suffered.

The following is the full interview with the Chief of Staff:

Question: After the defeat in Buenos Aires, is this the worst moment for the government?

Francos: Yes, last Sunday's defeat was undoubtedly a blow to the government , which had hoped for a more even election. The worst moment was definitely taking office and realizing the total disaster the country was in. Politically, the result of the provincial election was perhaps one of the worst, along with the successive legislative setbacks. The government came in with very clear ideas about the source of Argentina's ills. Clearly, the result of the election, which we expected to be more even—losing by 13 or 14 points, yes, certainly—was certainly a blow to us.

Q: What self-criticism are you doing?

F: There's a self-criticism that's more internal to our party's politics, and it has a lot to do with how our electoral proposal was put together. Suddenly, Milei was President of the Nation, and a national government undoubtedly requires having political and technical cadres who are suited to sustain this central idea of ​​the government. We would have to analyze why the Argentine people elected Milei . There were people who were tired of politics, and someone disruptive appeared, but they also elected him for the message he conveyed in his campaign, the message of "I'm going to end inflation and insecurity," two of the strongest demands of Argentine society. That certainly happened. Now, within the self-criticism, what happened that (in the election) made it impossible for us to achieve it? It happened to us that we didn't have the right technical or political cadres , and we had a President who was very firm in his determination to attack these two points. That was one of the issues that happened to us in this first stage of government.

Q: Why wasn't there a significant incorporation of Macri's cadre, and why were many second- and third-string personnel retained from the previous administration?

F: I think that was a mistake . There was a whole political discussion; sometimes when someone breaks into Milei's political space like that... Now, why didn't some PRO technicians join the government? Milei had a very daily relationship with President Macri for a long time, and for several months. But circumstances led to them becoming distant, even though their political work in Congress was close. We've surely made many mistakes there as well; we haven't been able to unite political wills, and that's part of the self-criticism we're engaging in.

Q: You've launched two political roundtables, another negotiating roundtable with the governors. Will there be more cabinet changes?

F: The government's intention was to show that, despite the coup, it was seeking ways out of the situation . The president was determined to maintain the same line of government. We did understand there was a political divide, so the president set up these political roundtables. Later, we saw that some didn't take it well , and we deepened it by incorporating a federal roundtable. At all times, the president wanted to convey that he is taking the lead in a time of crisis , and I think that's important for a government. Will there be changes? In times of crisis, one has to show that there is unity despite some differences. The reason for change, which will clearly happen, will be the replacements that occur when some of our ministers join the national Congress. We don't see the need for more changes at this stage , nor does the president. We will try to navigate all this public pressure from differences within the government.

Q: Will they be able to resolve the internal issues?

F: Sunday was a blow . There are different views on how to approach relations with provincial governments and Congress. I think we'll be able to resolve this through internal debate, and with President Milei's position, which is no small feat, I think we'll overcome it.

Q: You said it was a mistake to nationalize the campaign and that the Peronist apparatus had also worked. If that nationalization took place, what would change in October in the province of Buenos Aires?

F: It's a different election . One could make several observations; the first is that Kicillof was very astute because he played at solving the internal problem, by nationalizing the election because he wanted to become the leader of the Justicialist Party's proposal, and we nationalized it from the outset. We didn't want to lose the province of Buenos Aires as a sign that people understand the meaning of what the government is proposing. Perhaps it was a mistake on our part to nationalize an election and expose ourselves to a somewhat uncertain situation. On our side, there was a strong conviction that it was a very close election.

Q: Wasn't the Buenos Aires vote against Milei then?

F: I think that in the chaos of the province, the election was nationalized, but with the entire Justicialist Party structure, which is no small feat , with 90 mayoralties. A force we don't have.

Q: And won't that be repeated in October as well?

F: The October discussion is about how the President's ideas are defended in Congress. What's clear is that we defended what we could with a small group and the support of some like-minded political forces. What we have to make the Argentine people understand in this period between now and October 26 is that we need more parliamentary support to carry out all the important reforms coming up if we truly want to change the country. I've heard a lot about people barely making it through half the month on their salary, but when you look at the indicators, the truth is that real wages have grown since we took office; pensions have increased.

Q: What do you expect to happen in October? What's your forecast?

F: I don't know what will happen in the final result if the total votes are measured. It's also measured by the number of seats obtained . I think we'll do well there, and I have enormous expectations that the overall votes will also do well for us.

Q: There are two interesting things. One is Kicillof saying on Clarín that Milei must and can change. The other is a senator for Cristina Kirchner's party, who says Milei won't make it to October 26th...

F: For a few months now, we've been suffering an attack from political sectors trying to undermine President Milei's government. How do you undermine the government of a President who is so convinced of maintaining balance? By trying to create imbalances. They've introduced and passed laws that impact the balance, so the President was decisive. That's what happened, and it's very difficult, based on issues that generate sensitivity, like the Garrahan crisis, universities, and the disabled. They all generate a lot of sensitivity. What we can't do is think that, because some politicians think the government is handling things poorly, we'll consider removing him because that 's undemocratic . Of course, Kicillof proposes a different policy. Kicillof says "the government can still change." It's very simple; it means the state spending more money than it receives. So, whether the state issues money or goes into debt isn't in the government's mind, because it's returning to the same old policies. Yes, the allocation of spending can be discussed; Congress has passed a budget law for that, and the Executive Branch will present it on Monday.

Q: Regarding your message to investors, what would it be if there's another PJ victory in October?

F: All these laws that were passed in Congress against the government generated concern in the capital markets . I receive investors almost weekly from different sectors who from the beginning have asked, "Will this be sustainable over time?" Clearly, in recent days, since these laws were passed and some local elections have taken place, they have expressed concern that the policies promoted by Milei are not being consolidated in the elections. All these investors don't want a return to the past .

Q: The day after the election, you included the economic issue among the factors that influenced the vote. Did you also include the corruption allegations?

F: That definitely had an impact . I have no doubt that Spagnuolo's famous audio recordings on a topic as sensitive as disability had some impact. I also say that all of this was part of a chain of events that, for me, has a clear structure . It can't be a coincidence that audio recordings supposedly from a year ago were made public, the day before the Chamber of Deputies was scheduled to address the disability emergency. We didn't intervene in the judicial matter in any way; we let the justice system investigate, put everything it needs to put on the table to determine if there were any illegalities in the contracting of laboratories and drugstores.

We also want to address what happened with disability pensions. There has been an unprecedented increase in disability pensions in 20 years. Some corrupt policies were involved. That's also a matter for criminal investigation, not just the issue of what happened in the contracting process for the provision of medicines. We also don't want to take responsibility for the orchestration of unproven events . This entire campaign organized against the President's sister is tremendous. I've known the Mileis for many years, and the President is a transparent person, austere, and not interested in money except to live .

Q: Is the audio recording issue the biggest damage the government has suffered?

A: Yes, I think it's because it goes against the trustworthiness of a government. All of this seems to me to be affecting and impactful, which is why I would like this issue to be resolved immediately, and if anyone is responsible, they should pay. The government isn't going to protect anyone.

Q: How are you going to handle the issue of the LIBRA commission that has been formed and is requesting the subpoena of Karina Milei?

F: The $LIBRA issue, which the President admitted was a mistake, that he didn't think it had the significance it had, and that when the problem arose he withdrew the famous tweet, is another example of how politics intervenes in an issue where there was no commitment of public funds and where the United States justice system released the funds to Davis and initially said it saw no basis for continuing the action. The United States justice system says this, and we're still looking for hair in the milk . Everything that needs to be investigated should be investigated, but that's what the Justice system is for. Congress has no reason to set up investigative commissions that affect issues that the Justice system is investigating. Much less should it assume powers that only the Nation's Judiciary has. Let us respect the powers of each of the branches of government, not interfere in issues that the Justice system resolves, and not interfere politically in matters of national government management, which has a policy and a commitment to the Argentine people that was voted on in November 2023.

Q: Disability is the only law ratified by Congress after the presidential veto. It went into effect a few days ago. Is the government going to implement it? Is there any alternative to more disability funding, or will it not be enforced and the courts will be chosen?

F: The Executive Branch will promulgate it . Then it must issue a regulatory decree to see how the law is applied, and that has different aspects. We'll discuss this with the President. If it were up to me , I'd like to analyze it with the relevant minister and with the congressional committees to see how this issue can be addressed because this opens the door to new disability pensions. But let's first determine whether the ones that were granted were properly awarded.

Q: So the government isn't going to ignore that law, but rather see how it's enacted.

F: We're going to enact the law accordingly. It's also true that, I believe, Article 38 of the Financial Law states that when Congress passes a law, it must establish where the funds come from . They can't blame me, as the Chief of Staff, for reviewing the funds and how to rearrange them; that's not a solution; it's a lie. If not, tell me who we're going to take from? Retirees and then transfer them to disability.

I'm willing to meet with anyone who wants to tell me how we should do it. What we don't do is let them tell me, "Look, this is the disability system." What I don't find acceptable is that, as a result of an issue that generates so much sensitivity, the opposition in Congress attacks the government, saying, "Hey, sort it out however you can." That's an attack on President Milei. Let's discuss how. You're going to have a budget there starting this Monday . Well, look at how we pay for this within the national budget. What has been shown so far is that there was a deliberate action against this government's central policy, which is fiscal balance. This was a deliberate political action against a government that also has a very clear political direction in which it wants to go. These issues are always settled electorally.

Q: The budget provides for more funds for the provinces.

F: The Co-participation Law clearly establishes how national taxes are distributed—primarily VAT and Income Tax—and then each province has its local taxes. What can the nation do regarding the national taxes that are co-participated? Nothing. Regarding provincial taxes, nothing either, because it's their decision. Regarding certain public works that are important for some provinces, the government's policies are against it , because we believe that as soon as macroeconomic conditions allow, all these works will be in the hands of the private sector . We don't believe the state should participate in that. There won't be anything specific for the provinces in the budget. The issue of ATN (Advances from the National Treasury) has been raised. We use it for emergency situations. The governors now want that to be co-participated. That may be one vision, but then they'll have to take charge of emergency situations . We believe this requires a different type of agreement. We will discuss it, but the national government will not have the resources to handle emergency situations.

Q: The draft budget involves a second phase of adjustments because it talks about cutting subsidies and also public administration spending...

F: The President will announce the general concepts, and then we'll debate them in Congress. Clearly, there will be funding cuts in some areas.

Q: The approval of the budget is in jeopardy because the opposition has won 40 debates so far this year.

F: The government wants a budget approved that establishes revenue and expenditures. Revenues are practically unchangeable because there is greater stability now due to lower inflation. We'll have to articulate how it's distributed . If Congress has a different proposal, we'll have to discuss it and negotiate. We're willing to engage in all the debates necessary to have an approved budget because it's much easier for the administration to work.

Q: Can a further extension be ruled out?

F: I can't predict what might happen. As Chief of Staff, I would like to have a budget. But I also believe there can't be a modification to the budget mandated by the administration that completely changes the concepts proposed by the national government, which is charged with the responsibility of governing. Congress is one of the branches of government, but it doesn't govern . They can't impose actions on us and invade the administrative power of the state in that way.