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ECONOMY | 05-04-2021 10:28

Guzmán: IMF credit line deal will not be finalised before May

Economy Minister Martín Guzmán says a plan with the International Monetary Fund to repay US$45 billion in debt won’t be finalised by May or June.

Economy Minister Martín Guzmán says a plan with the International Monetary Fund to repay US$45 billion in debt won’t be finalised by May or June.

Changing the terms of the previous repayment scheme, which were agreed with ex-president Mauricio Macri's government in 2018, would require the support of nations like the United States, China, Germany, Japan and France, Guzmán said in an interview with CNN Español.

Argentina's government is unable to pay the IMF the US$45 billion required between September 2021 and 2024, he added.

“It isn’t a technical negotiation between the IMF staff and the Argentine government,” Guzmán said. “It’s a discussion of a geopolitical nature. There isn’t enough time if one wanted a deal soon.”

The comments come hot on the heels of meetings between Argentine and IMF officials last month. Negotiators Luis Cubeddu and Julie Kozack said in a statement that they had found “common understanding” with Argentina on areas such as inflation, exports and developing domestic capital markets.

“The worst of all would be to make a hasty deal based on propositions that harm Argentina,” he said.

Guzmán was also quizzed about a recent speech made by Vice-President Cristina Fernández de Kirchner, who downplayed the possibility of an agreement with the country’s largest creditor. 

“We can’t pay because we don’t have the money to pay,” the former president said at an event on March 24, adding the existing terms and conditions as “unacceptable.”

Fernández de Kirchner’s comments came just as Guzmán was finishing his meetings in Washington with IMF staff. 

Asked if those words had helped or hindered the talks in the interview, the economy minister told CNN she was merely talking "frankly."

“Things have to be said frankly. There a reality is being raised," he said.

Addressing if calls for the IMF to break its existing rules and agree a repayment schedule over a period of more than 10 years, Guzmán said Argentina clearly wanted "terms that are lengthened."

He went on to address the coronavirus pandemic and the rise in infections witnessed over the past week, warning that the country "could not bear" another strict lockdown.

"Today the economy could not bear a total shutdown, a strict Phase 1 quarantine like the one that was implemented in March 2020 – that is not the idea," said the official. 

"Today we have no restrictions on circulation and we are not going to have them, like at the beginning of the pandemic," he added.

Guzmán said the government is optimistic that economic activity would rebound strongly this year. Last year, Argentina's economy was hit by a 9.9 percent contraction in gross domestic product.

"The pandemic hits the whole world, but the policies adopted in 2020 allowed us to be in a better situation than other countries in the region, having protected work and capital in the economy," he argued.

He said the Alberto Fernández administration expected the economy to grow by seven percent in 2021 and had raised growth forecasts.

"It was 5.5 percent in the September 2020 projection and today it is seven percent, which is also a prudent forecast, because it is convenient to be
prudent," he said.

 

– TIMES/NA/BLOOMBERG

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