Friday, June 21, 2024

ARGENTINA | 27-08-2019 09:04

Alberto Fernández renews criticism of deal after meeting with IMF team

Peronist candidate reiterates criticism of Fund, saying that "those who have generated this crisis have the responsibility of putting an end to and reversing it."

Representatives from the International Monetary Fund met Monday with opposition presidential candidate Alberto Fernández, the Peronist frontrunner to win the October 27 election in Argentina.

The meeting was long anticipated, with Fernández on record as a steep critic of the record US$56-billion stand-by agreement sealed with the Mauricio Macri administration in 2018 amid a currency crisis. In exchange for financial aid, the Mauricio Macri government agreed to implement a programme of strong fiscal austerity. 

However, after Fernández's strong performance in Argentina's recent PASO primary elections – from which he emerged with a 15-point leader over President Macri – fears have emerged that the Peronist hopeful may not stick to the terms of the deal if elected. He has said he would like to renegotiate the accord at a minimum.

Speaking yesterday in a statement, Fernández doubled down on his criticism in the wake of yesterday's meeting, reiterating his view of the arrangement.

He accused the IMF and the government of being responsible for a "social catastrophe" in Argentina.

"The loan received by the country and the raft of conditions associated with it has not generated any of the hoped-for results: the economy has not stopped contracting, employment and the situation for businesses and families has continued to get worse, inflation has not shown any sustained reduction, and public debt has only grown," said a statement from Fernandez's office.

"During the meeting, [Fernandez] reiterated his concern that the credit extended by the IMF to the national government has been used, in large part, to finance capital outflows. Those who have generated this crisis, the government and the IMF, have the responsibility of putting an end to and reversing it."

Fernández reiterated his differences with the policies of the IMF and the current government.

"The economic programme promoted by the National Government does not reflect any of the priorities established in the Frente de Todos platform. Nor are there any coincidences with the policy recommendations promoted by the IMF," he said.

He stressed that in both cases there are "dogmatic approaches that do not meet current objective conditions or solve the main structural problems of the Argentine economy."

Fernández's economic team said after the meeting that, "as they had warned in the first meeting" with the IMF's mission team back last June that "the last disbursement [of the IMF credit-line] had been entirely intended to finance the flight of foreign exchange."

The IMF mission team also met yesterday with President Macri's economic leadership, as it did the weekend, including new Finance Minister Hernán Lacunza and Central Bank President Guido Sandleris.

The international agency team "held constructive working meetings" with the Argentine authorities to analyze "the balance of recent events," an IMF spokesperson in Washington told reporters, who described the meeting with Fernández and his advisers as a "productive exchange of opinions." 

Last week Fernández ruled out chances that Argentina was headed for a default if he is elected president.

The IMF's team also denied unconfirmed reports that it had asked Fernández and Macri to bring forward the October 27 elections amid concerns over a "power vacuum."

Reports in the local press over the weekend suggested the IMF was seeking to introduce the idea into discussions. However a statement released yesterday said that "at no time had members of the IMF delegation spoken in these terms."


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