Saturday, June 3, 2023

ARGENTINA | 10-02-2020 17:01

From Havana, CFK demands ‘substantial haircut’ of Argentina's IMF debt

With Cuban leader Miguel Díaz-Canel watching on, vice-president describes US$57-billion loan with IMF as "illegal" and demands institution take a haircut on repayments.

Vice President Cristina Fernández de Kirchner has accused the International Monetary Fund (IMF) of granting Argentina an "illegal" multi-billion-dollar loan and demanded the institution offer the country a "substantial haircut" in the amount it should repay.

"At the very least, it [the IMF] should make a substantial haircut, because a loan was made ... violating the obligations of the International Monetary Fund itself," said the former president, speaking in Cuba.

Fernández de Kirchner was in Havana over the weekend to attend the 29th Havana International Book Fair, at which she presented her memoir-cum-campaign-trail book Sinceramente. The former president was the talk of the town – Argentine writer Miguel Figueras described the event as “more than a book presentation, [and] something more like a Rolling Stones concert.”

Cuban President Miguel Díaz-Canel and other Cuban government officials were also in attendance at the closed-door event.

During the presentation of her book, the Kirchnerite leader vehemently criticised the IMF for granting the Mauricio Macri administration an “Illegal loan” worth up to US$57 billion.

“The solutions must be exposed before the society because it's the society that will have to pay for it; those are the 45 millions of Argentines,” she added.

“Now they said that they can't make a haircut because the status forbids [it]," she said, countering that the IMF's rules "also forbids lending to flying capital,” a reference to bondholders, hedge funds and holdouts, which were famously derided as "vulture funds" during her own 2007 to 2015 terms in office.

President Alberto Fernández just finished a European tour, during which he sought support from nations before talks with the IMF re-open over debt repayments. The president is in dire need of international support from leading industrialised countries as he seeks restructure Argentina's debt-burden.

The Peronist leader has repeatedly said the country wants to pay back its debt, but lacks the means to do so. Argentina, which has been gripped by recession since mid-2018 and is suffering an annual inflation rate soaring over 50 percent, cannot meet these commitments until it recovers economic growth, he argues.

The government is hoping to renegotiate US$195 billion (around 57 percent of GDP) out of a total debt of US$311 billion – according to the latest official figures – including the deeply unpopular US$44 billion bailout loan from the IMF granted in 2018 under the Mauricio Macri administration.

While the IMF agreed to loan Argentina US$57 billion in total, President Fernández waived the outstanding tranches of the loan. He is seeking to close negotiations with creditors before 31 March, the date after which Argentina will have to face heavy maturities.

"The maturities follow one another in increments of 30 billion [dollars], in increments of 40 billion [dollars] per year. There is no country that can sustain that level of payment," Fernández de Kirchner argued on Saturday.

The Unidad Ciudadana leader also proposed that Argentina say "nunca más" ("Never again") to foreign debt, and called for an investigation into why the Macri administration took on so much debt. 

During the event, the former president thanked the Cuban government and doctors for their treatment of her daughter, Florencia, who she said is "much better" after almost a year of medical treatment on the island.

This is the vice-president's ninth trip to Cuba to visit her 29-year-old daughter, who is receiving medical attention at the Centro de Investigaciones Médico Quirúrgicas (Cimeq), a state-run clinic where personalities such as the late Venezuelan ex-president Hugo Chávez, former Bolivian president Evo Morales and Fidel Castro himself were also treated.


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