Thursday, May 30, 2024

ECONOMY | 28-01-2020 23:38

IMF to send team to Argentina in February after 'positive' talks with Guzmán

Economy Minister Martín Guzmán holds "very productive" talks with officials from International Monetary Fund in New York, as Argentina looks to stretch payment terms of its US$44-billion credit-line.

The International Monetary Fund will send a mission to Argentina next month to discuss the crisis-hit nation's economic prospects and debt, it was confirmed Tuesday.

Economy Minister Martín Guzmán on Tuesday met with IMF officials in New York on Tuesday, with IMF spokesman Gerry Rice later describing the talks as "very productive."

President Alberto Fernández is seeking to renegotiate Argentina's US$44-billion credit-line borrowed from the IMF over the last 18 months, which comprises a sizeable part of the country's US$335 billion foreign debt – over 90 percent of its GDP.

"The exchange was an opportunity to continue the ongoing dialogue and hear from the minister about the Argentine authorities' economic plans and exchange views on the debt sustainability analysis," Rice told reporters.

IMF Managing Director Kristalina Georgieva will meet with Guzmán at the Vatican on February 5, and "an IMF technical mission is expected to travel to Buenos Aires in February to continue to exchange views on macroeconomic plans and debt sustainability," he added.

Fernández is currently embarking on a European tour, which will include a meeting with Pope Francis and national leaders to drum up support for his economic plan. 

The Peronist leader took power in December, inheriting an economic crisis that began 18 months ago with a currency collapse under former president Mauricio Macri. 

The head of the IMF's Argentina team, Luis Cubeddu, told La Nación that the talks in New York had been "quite constructive" and "productive." 

"We were together for more than an hour," said the Venezuelan economist, describing it as "a positive meeting."

Julie Kozack, the IMF's deputy director of the Western Hemisphere department was also present. 

Both the IMF and Guzmán's team had remained tight-lipped prior to the meeting, refusing to even confirm its location. The Fernández administration, which took power on December 10, has refused to give out any detail on Argentina's proposal, with the president saying that "any declaration can create undue expectations."

Guzmán, who arrived in the US on Monday, met with more than 50 investors and entrepreneurs at a Council of the Americas event in Manhattan soon after arriving. A spokeswoman for the Council told the AFP news agency that that meeting "was private" and took place "without the press." He also met with a US Treasury official later in the day, reported Noticias Argentinas.

On meeting, Guzmán told reporters that his trip was going "very well," although Noticias Argentinas said some participants had expressed doubts about the lack of concrete definitions in terms of Argentina's economic plan.

The Macri administration originally sought US$57 billion in credit, though the government has only received US$44 billion to date. Fernández has already told the IMF it does not want to take any more money from it. The government's objective is to refinance the loan's payment schedule and stretch terms. According to the original deal, made by the Macri administration, Argentina must return more than US$46 billion between capital and interest between 2022 and 2023.


According to recent reporting by Perfil, the government wants to stretch payments terms rather than renegotiate an "extended facilities" plan, which is the IMF's normal approach to countries in Argentina's situation.

Fernández off to Europe

President Fernández embarks his own tour to Europe on Wednesday, with the debt renegotiation looming large in the background.

"We go to the countries of Europe, as well as seeing His Holiness, to visit Western leaders. Because we're close, because we want to know what they think of our country and because Argentina is in the midst of a complex negotiation, essential for our future, and they all have a seat at the IMF," Foreign Minister Felipe Solá said this week.

Fernández's first stop on his whistlestop tour will be Vatican, where on Friday (January 31) he will be received by his compatriot Pope Francis. 

"He is a moral leader in the world. I thank him very much [for the meeting], he is a role model," Fernández said recently, when asked about the trip.

While in Rome, the Peronist leader will also meet with officials from the UN's World Food Programme and with Italian President Sergio Mattarella and Prime Minister Giusseppe Conte.

Fernández will then head to Germany for a meeting with Chancellor Angela Merkel on Monday, February 3, before flying to Madrid for meetings with Spanish leader Pedro Sánchez and King Felipe VI the following day.

He closes his trip with a meeting in Paris on February 5 with French leader Emmanuel Macron, an encounter Fernández said he was looking forward to.

"France is an important investor in Argentina. French companies are starting to take an interest in lithium" deposits in the north of the country, he said recently.

Fernández recently returned from Israel, his first international trip, for an international forum on Holocaust Remembrance. While in Jerusalem, he had bilateral meetings with three of Israel’s most significant figures: Prime Minister Benjamin Netanyahu, President Reuven Rivlin, and opposition leader Benny Gantz.

Political analyst Rosendro Fraga said this latest trip was a positive step. "This European tour of the president, before serving even two months in government, is without a doubt a success, given that on December 10, when assuming office, only three presidents attended [the inauguation] – those of Cuba, Paraguay and Uruguay."

According to Fraga, the trip to Israel and meeting with Netanyahu "allowed Fernández to reduce pressure on sensitive issues and improve links with the United States," said Fraga, adding that this European leg should be a seen as part of a bid "to improve Argentina's position in debt renegotiations."

"We don't want to be outside the world," Fernández said in a interview with the C5N news channel on Sunday. "We know that we are in a globalised world and we can be in a globalised world without being idiots. We're a country that needs the world's help and that's what we'll tell the world's leaders."

Fernández assumed power in December, inheriting an economic crisis that began 18 months ago with a currency collapse. The country is blighted by 40 percent poverty and one of the highest rates of inflation in the world, almost 54 percent in 2019.



More in (in spanish)