Guevara’s headaches
The 2024 congressional sessions didn’t end well for the government. First and foremost, Congress sank the mini-tax reform, the Ley de Financiamiento. President Gustavo Petro reacted badly to this, announcing that “the budget crisis will not be paid for by the people,” and promising to: 1) explore new sources of financing, such as Asian or Arab capital; 2) contemplate possible debt “default;” 3) cut key appropriations, like Metro de Bogotá construction; and 4) review the terms of future borrowing. Nonetheless, failure to approve the 2025 budget forces the government to issue it by decree. It cannot be issued for its original COP 523 billion, since it would lack secure sources of revenue; rather, new Finance Minister Diego Guevara will be forced to cut more than COP 10 trillion.
The Petro administration will face even more challenges in Congress in 2025, due to corruption accusations, criminal cases, fiscal imbalance and a lack of budget execution. Too, the campaign for the 2026 presidential elections has started too early, with many pre-candidates already publicizing their names.
The closing of this set of congressional sessions could hardly be sadder, due to the fight between Petro and conservative Senate president Efrain Cepeda. Petro has, ridiculously, accused Cepeda of wanting to overthrow him; Cepeda has (futility) urged Petro to calm down. But Petro’s frenetic tweeting suggests he has little interest in abandoning his long charades, or dedicating himself to more productive pursuits, such as governing Colombia.
Finance Minister Ricardo Bonilla’s “resignation” came as a blow to many, including us. But for him there’s a silver lining: he leaves the Ministry right before the fiscal situation enters a critical phase.
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