OSTENSIBLY, he had gone to see the president about export taxes on leather. But Roberto Lavagna, Argentina's economy minister since April 2002, may not have been too surprised on November 28th when Néstor Kirchner sacked him as part of a cabinet reshuffle. Their relationship had been rocky for months. Mr Lavagna had been appointed by Eduardo Duhalde, Mr Kirchner's predecessor, a fellow-Peronist but now a foe. When he disagreed with the president on policy, he did not conceal it. His fate was probably sealed on November 22nd, when he accused the planning ministry—whose head, Julio de Vido, is Mr Kirchner's closest aide—of allowing contractors to overcharge the government for building roads.

Mr Kirchner is in a stronger political position since a congressional election in October, in which his candidates defeated those of Mr Duhalde. Mr Lavagna's departure may mark a turning point for Argentina—and a move further away from market economics and towards populism. The new minister, Felisa Miceli, who had been president of the state-owned Banco de la Nación, is a disciple of Mr Lavagna but has none of his political clout.

Mr Lavagna can claim much of the credit for the speed and vigour of Argentina's recovery from its debt default and devaluation of 2001-2 (see chart). He took office at the darkest moment, when Argentina appeared poised for hyperinflation. By imposing fairly tight fiscal and (at first) monetary policies, he stabilised prices and the exchange rate. High prices for Argentina's commodity exports, devaluation and the existence of much idle capacity in the economy did the rest.

The minister was no neo-liberal. He was tough both with the IMF and with holders of Argentina's defaulted bonds. But unlike Mr Kirchner and his clique of advisers from his remote Patagonian province (dubbed “the penguins” by Argentines), Mr Lavagna knew and understood the financial world. His technical competence gained the grudging trust of investors, local businessmen and outsiders. He clashed with the president over how to tackle a recent surge in inflation, which is likely to end the year at 12%. With it has come a rash of strikes.

Some analysts had expected Mr Kirchner to tack towards the centre after the congressional election. The IMF and investors have a long wish-list. It starts with allowing public utilities to raise their tariffs (many have been frozen since 2002). It includes re-opening this year's debt deal to bondholders who had rejected its terms. The best way to tackle inflation would be to allow the peso to appreciate.

This seems unlikely to be Ms Miceli's agenda. She recently accused the IMF of “frighteningly simplistic theories” of economics, and dismissed concerns about inflation as “an argument to maintain low wages.” Many analysts now expect the government to impose further price controls. If so, local business may start to fall out of love with Mr Kirchner: the Buenos Aires stock-exchange index fell 5.9% in the two days after Ms Miceli's appointment.

“This is the real Kirchner,” said one insider. “He was always going to wait for the debt restructuring and the elections but now he's going to implement his ideals.” The other cabinet changes also point leftwards. Jorge Taiana moves up to the top job at the foreign ministry where he was the number two. Mr Taiana belonged to the Peronist Left in the 1970s. The new defence minister, Nilda Garré, had links to the Montonero guerrillas in that era. Ms Garré had been the ambassador in Caracas. Like Mr Taiana and Mr de Vido, she favours stronger ties with Hugo Chávez's leftist government in Venezuela.

That suggests that Argentina might tilt away from friendship with the United States and engagement with the IMF and towards Mr Chávez. The government has been paying its debts to the IMF. But repayments are due to rise sharply over the next two years. The government would like an agreement to roll over some of the $4.4 billion due in 2007—but without the reforms the Fund is likely to insist on. At last month's Summit of the Americas, which Argentina hosted, Mr Kirchner asked for George Bush's support on this. The American president was non-committal. Argentina ended up siding with Venezuela at the summit in opposing any resumption of talks on an American-backed Free-Trade Area of the Americas.

Since the summit, Mr Kirchner has continued to court Mr Chávez. He visited Caracas last month, where he apparently obtained a promise that Venezuela will invest more of its oil windfall in Argentine bonds (of which it already holds almost $1 billion). That might just allow Mr Kirchner to escape an IMF agreement. In exchange, Mr Chávez may revive a request to buy a nuclear reactor from Argentina—something which would alarm the United States because of his friendship with Iran. Mr Kirchner brought a handful of nuclear engineers on his trip to Caracas.

Such a realignment may not happen. In politics, unlike motoring, when preparing to turn right, signal left, was the advice once famously proffered by Juan Perón, the founder of the movement which Mr Kirchner leads. But having cast off the reliable Mr Lavagna, Argentina's president has embarked on a more uncertain course.