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ARGENTINA | 10-05-2021 10:04

Fernández kicks off Europe trip as Paris Club debt payment nears

Argentina has reportedly asked the Paris Club to allow it to delay upcoming US$2.4-billion payment, due at the end of May, until it has reached an agreement with the International Monetary Fund.

President Alberto Fernández arrived in Portugal Sunday, kicking off a five-day trip across Europe as he looks to drum up support to delay a US$2.4-billion payment to the Paris Club.

Fernández met with top authorities in Portugal before moving on to Spain, France and Italy. Economy Minister Martín Guzmán, who completed a European trip of his own in the second week of April, is accompanying the president on the trip.

The country has asked the Paris Club to allow it to delay its payment, due at the end of May, until it has reached an agreement with the International Monetary Fund, and hopes for an answer by May 31, according to a person with direct knowledge of the negotiations.

The person, who asked not to be named because talks are private, declined to say what the country’s steps would be if it didn’t receive a favourable response by that day.

The payment comes at a difficult time for Argentina. The country is in its third year of recession, with inflation estimated near 40 percent and double-digit unemployment. While analyst estimates for net reserves vary, some calculations have put them near zero since September of 2020.

In addition to the Paris Club payment, Argentina faces US$4.8 billion in principal and interest payments to the IMF this year.

Meanwhile, the country also is in talks with the IMF for a new programme that seeks to delay payments on an existing US$45-billion plan. Those talks have stalled.

Here’s Fernandez’s expected agenda:

  • May 9: Meeting with Portuguese President Marcelo Rebelo de Souza
  • May 10: Lunch with Portuguese Prime Minister Antonio Costa, travel to Spain
  • May 11: Meeting with Spanish King Rey Felipe VI & with Prime Minister Pedro Sánchez
  • May 12: Meeting businessmen at Argentine Embassy in Paris, then Fernández will be received by French President Emmanuel Macron; travelling to Italy
  • May 13: Meeting with Pope Francis, then lunch with Italian President Sergio Mattarella and meeting with Mario Draghi
  • May 14: Return to Buenos Aires
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by Jorgelina do Rosario & Carolina Millan, Bloomberg

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