Alberto Fernández stepped off the plane that landed at Rome-Fiumicino Airport convinced that the G20 Leaders Summit will provide him with new momentum that will aid progress on a new agreement with the International Monetary Fund.
The novelty with which the president hopes to return to Buenos Aires has to do with the final document signed by the world’s main leaders, recommending to the international organisation a third line of credit with longer terms than usual be offered. This would be a "resilience fund" that would function as the key for Argentina to extend the terms of its disbursements beyond the 10 years currently allowed.
Fernandez believes that the main problem facing Argentina today in relation to the debt generated under the Mauricio Macri government is having to pay US$19 billion next year. The presidential delegation that arrived in Rome on Friday is optimistic that there will be an agreement by the end of the year and support for its two requests before the Fund. On the other hand, they assure that the IMF will not set targets that would mean an adjustment.
The government's first objective has to do with a reduction in surcharges (from three percent to one percent). This would mean annual savings of some US$900 million for Argentina.
The second involves the incorporation of a clause detailing that if the conditions of loans granted by the multilateral lender improve, whether its rates or repayment dates, Argentina will be able to benefit too.
For the president, this is where the importance of the G20 comes into play. The intention is that the final document from the summit will recommend a third line of credit. The government believes that this could happen this weekend. It had already been a request that Economy Minister Martín Guzmán took to the meetings with his peers from other nations.
Other issues remain at hand: Will the president show a hardening of his discourse towards IMF Managing Director Kristalina Georgieva this Saturday in the bilateral meeting they will share? He assures that he will tell her what he has been repeating since he became a presidential candidate – in the words of the head of state, this means that Argentina will take responsibility for Macri's signature but that the IMF must take responsibility for Lagarde's role in granting a loan approved by “the White House."
The head of state stresses that he says this, but he also insists that he wants to reach an agreement. And he feels that one is close.
In addition to advancing debt discussions with the international lender, Fernández supports Argentina's participation in this summit. He believes that being part of the 20 "most influential" countries in the world means that Argentina is respected for its "sustained institutionality," unlike most other countries in the region. This is a message for domestic politicians (both in government and opposition), with arguing over the future of Fernández's government post-November 14 already under way.
With a long list of bilaterals on his agenda, time will be tight. It is unlikely that Fernández will meet Biden, but a chance meeting isn’t ruled out. “There was no refusal on his part, although his agenda is very complex," says one of the president’s entourage. The Peronist leader welcomed one of the Democratic leader’s recent speeches in the last few hours, in which he said the rich should pay more taxes and denouncing evasion. "Comrade Biden," they joked.
Fernández is mindful of a conversation that his Strategic Affairs Secretary Gustavo Beliz had a few days ago with US National Security Advisor Jake Sullivan. The US official reportedly told the Argentine that he and Biden identify as Keynesians, while Barack Obama and Donald Trump are classified as liberals. Along these lines, they speculate that the current US government may be accompanying Argentina in its discussions with the IMF.
Key IMF meetings
Economy Minister Martín Guzmán will hold a meeting with Julie Kozack, the deputy director of the International Monetary Fund's Department for the Western Hemisphere, while in Rome this weekend, according to a government official.
The technical meeting will take place within the framework of the G20 Leaders' Summit. The day of the meeting is yet to be defined. An IMF spokesperson also confirmed that Kozack will meet with Guzmán as part of the trip.
Argentina is currently in talks for a new financing programme to resolve its US$44-billion debt with the Fund.
Separately, President Alberto Fernández will meet with IMF Managing Director Kristalina Georgieva for a bilateral meeting on Saturday.
Doubters
Alejandro Werner, former director of the Western Hemisphere Department of the International Monetary Fund, said this week that Argentina “is not going to pay” its debt with the IMF and warned that a new deal between both sides would only be “a temporary band-aid to delay the bank run for four months."
"Argentina is not going to pay the IMF," said the economist, who left his post at the end of August after almost eight years with the Fund.
The country "is not going to carry out good macro-micro institutional policies,” he said. “At most, with an IMF programme, we will have four months in which they do not pass a single review. And that is all, we will return to arrears or near arrears at the end of the day."
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