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ECONOMY | 07-10-2020 00:52

IMF vows not to put 'pressure' on Argentina over loan

Kristalina Georgieva says IMF has "no intention of putting pressure on Argentina at this time," as negotiators from Fund arrive in Buenos Aires for talks.

Negotiators for the International Monetary Fund have arrived in Argentina intending to listen to the government’s plans and aren’t immediately requesting spending cuts, IMF Managing Director Kristalina Georgieva said Tuesday.

The Fund’s Julie Kozack and Luis Cubeddu landed in Buenos Aires to begin the first round of in-person, formal negotiations for Argentina’s new financing programme.

Argentina owes the IMF US$44 billion from a failed agreement given to the Mauricio Macri administration, which had to make unpopular spending cuts during an ongoing recession to comply with the deal. Amid the Covid-19 pandemic, the IMF won’t seek such austerity right now, Georgieva said.

The IMF chief said the Fund has "no intention of putting pressure on Argentina at this time" in an interview with CNN's Spanish-language arm.

"We've come to Argentina above all to listen to the authorities, to listen to the Argentine people," said Georgieva.

"We've made it very clear in this crisis that it's important to support businesses and, most importantly, workers. We are not coming with the idea of, ‘Oh, well, let’s see how we can further tighten up spending in these times,’” she told CNN en Español. 

Argentina is hoping to renegotiate repayments on the debt agreed in 2018 under Macri. The credit-line was originally meant to be $57 billion, but President Alberto Fernandez halted disbursements when he took office in December 2019. The first repayments are due in September 2021.

"We'll see how the dialogue goes. We hope to be useful to Argentina to define medium-term growth objectives, to see what the obstacles to growth are and also so that the economy comes out of it strengthened and can respond to the expectations of the Argentine people," said Georgieva.

"We want to be part of a sustainable solution to what has been cycles of advances and setbacks in Argentina for such a long time. "We're going with an open mind to look for a way to give Argentina strength, stability and prosperity," she added.

Asked whether the IMF was willing to lend to Argentina again, Georgieva said “we are in a very early stage” of talks, adding that “Argentina is a member of the IMF, and, like every member, we are there for you.” 

The Alberto Fernández administration has given no indication that it will seek further funding. 

The IMF mission team is due to stay in Buenos Aires this week, with a second trip planned for November. Negotiations are expected to continue into early 2021.

– TIMES/AFP/BLOOMBERG

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