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ECONOMY | 13-02-2021 10:26

Congress approves bill blocking debt issuance without legislative approval

New law will apply to any new debt agreements, including with the International Monetary Fund.

Congress on Thursday passed almost unanimously a new law making parliamentary approval mandatory before signing any debt agreements, including with the International Monetary Fund (IMF), with whom the government is currently renegotiating the payment of major loan.

The bill, already approved by the Senate last November, was only opposed by the two FIT leftist deputies with 233 of the 257 deputies from both the government and opposition benches voting in favour and a further two abstaining.

"Every programme of financing or public credit with the IMF or any expansion of the sums of those programmes or operations will require express approval by a law of Congress," read the text.

Lower House Budget Committee chairman Carlos Heller affirmed that the bill "will mark a milestone in legislative history in relation to public debt." 

The Alberto Fernández administration is trying to restructure payments on the stand-by loan drawn by his predecessor Mauricio Macri from the IMF to avert a financial crisis in 2018.

The original sum was US$53 billion (later bumped up to US$57 billion) of which US$44 billion had been paid out by the inauguration in late 2019 of Fernández, who promptly suspended further tranches with the argument that "for now Argentina cannot return even a dollar."

Fernández wants to postpone any loan repayments until 2025 while the economy recovers from a recession dating back to 2018.




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