Argentina will ask the International Monetary Fund (IMF) for an Extended Fund Facility (EFF) programme as part of the government's efforts to delay repayments on the US$44 billion it owes the multilateral organisation, Economy Minister Martin Guzman confirmed Monday.
"The IMF staff and the Argentine government consider that in the current circumstances, this type of programme is the best alternative available," said the minister.
An extended facilities programme would give the country at least four-and-a-half years to begin paying down its debt once it is approved, Guzmán told reporters at the Economy Ministry on Monday. Typically, EFF schemes require economic reforms as part of any deal.
"An EFF scheme is designed to provide long-term assistance to nations facing compared to assistance provided under the Stand-by Arrangement, assistance under an extended arrangement features longer programme engagement — to help countries implement medium-term structural reforms — and a longer repayment period," according to the IMF.
The Washington-based crisis lender will send a mission team to meet with officials in Buenos Aires this Tuesday, November 10, to discuss the country's challenges amid the coronavirus pandemic, including debt owed to the Fund.
The government is hoping to renegotiate repayments on a US$44-billion loan from the IMF in 2018. The credit line was originally meant to be US$57 billion, but President Alberto Fernández halted disbursements when he took office in December 2019. The first repayments are due in September 2021.
"We have been doing very constructive work with the agency and the intention is to replace the current programme with a new one that is based on completely different principles, understanding that there is no restoration of macroeconomic stability without the recovery of economic growth," Guzmán said in a statement issued Monday.
The country will also present a multi-year macroeconomic programme to Congress, which will determine the fiscal path, financing goals, and international reserve targets until 2025, the minister added.
Future foreign debt to require congressional approval
In a statement also issued Monday, Guzmán also said that the government would seek to present a bill to Congress requiring all any future foreign debt issuances be granted congressional approval. The deal would apply to any agreement with the IMF, the minister added.
"We think it would be healthy for decisions to borrow in foreign currencies to have the approval of Congress," Guzmán said in a statement issued by his office.
The bill will be presented to Congress this week – coinciding with the IMF mission team’s visit – and would kick in for both debt issued under foreign legislation and agreements with multilateral organisations, such as the IMF.
"This has to do with turning debt sustainability into a state policy," said the minister.