If Mr Kirchner now chooses to pursue a more radical approach to economic management it will increase the possibility that Argentina’s economic recovery will run into serious difficulties.

Since taking office in 2002 Mr Lavagna masterminded Argentina’s recovery from the twin default and devaluation crisis of December 2001. Macroeconomic stability, underpinned by firm fiscal policy – including a primary surplus (before debt payments) of 3.7 per cent of gross domestic product – helped Argentina take advantage of favourable conditions in international markets.

High commodity prices and the competitiveness of the export sector (boosted by exchange rate intervention) helped lift exports to a record $38bn this year. Mr Lavagna’s team restructured defaulted debt so successfully that the country is now in a position to raise fresh finance in dollars at about 9 per cent per year, even though it remains in dispute with holdout creditors. This year the economy is on track to record its third successive year of more than 8 per cent growth.

However, as in many other Latin American countries, fiscal discipline is under strain, with pressure for more spending from populist politicians. Ahead of this year’s legislative elections current spending rose by 24 per cent, much faster than revenues. Inflation is running at an average monthly rate of nearly 1 per cent, nearly double last year’s rate.

Investment is growing in construction but is at a standstill in other areas. Capacity constraints are apparent in energy and in utilities. The government’s refusal to countenance increases in tariffs frozen since 2002 is one of the main reasons. Suez, the French utility company, has already decided to write off its investment.

Without Mr Lavagna, who was a moderating influence in Mr Kirchner’s administration, these tensions could become more serious. While Mr Kirchner has tended to opt for confrontation, Mr Lavagna urged caution, acting as a bridge between a parochial government and the rest of the world. Mr Lavagna, for example, had wanted to negotiate an agreement with the International Monetary Fund. He pressed the government to reach agreement with the utility companies on tariffs but was again overruled. More recently he has warned against ceding too much ground in wage negotiations with public sector unions, warning of inflation risks.

Felisa Miceli, Mr Lavagna’s successor, needs to send the same kind of tough message. She should not allow Argentina’s buoyant external position to lull her into a false sense of security nor let political pressures weaken her resolve to maintain discipline.