Argentina’s tentative agreement with the International Monetary Fund suffered an early setback Monday when the ruling coalition’s leader in the lower house resigned in protest over the deal announced by the government last week.
Máximo Kirchner, the son of powerful Vice-President Cristina Fernández de Kirchner, announced the move in a lengthy statement Monday. The congressman, who will nonetheless remain a lawmaker, cited the government’s negotiations with the IMF to reschedule payments on over US$40 billion in outstanding debt as reason for his departure.
“This decision is born from not sharing the strategy utilized, and much less the results obtained, in the negotiations with the IMF, led exclusively by the economic cabinet,” Máximo Kirchner, a key voice in the ruling coalition’s far-left wing, wrote.
The outspoken resignation threatens to trigger a political crisis within the broad coalition that underpins the government of President Alberto Fernández on top of imperiling Argentina’s negotiations with the IMF. Talks had a major breakthrough last week when Economy Minister Martín Guzmán detailed several understandings the government had reached with the Washington-based organisation including reducing the fiscal deficit.
Fernández said in a TV interview Monday night that his powerful vice-president doesn’t agree with her son’s decision to step down from his post. When asked if she supports the IMF deal rolled out last week, the president said she has “different views” without going into more detail.
Fernández said he spoke to Máximo Kirchner last week and earlier Monday.
“Frankly I told him it wasn’t necessary,” to step down, said Fernández, who insisted he obtained the best deal possible with the IMF. “Maximo told me his differences on this issue.”
Fernández added that the IMF pact would not include a major price hike in utility bills, a hot button topic in Argentine politics.
The agreement must be approved by congress and Kirchner leads an important group of lawmakers whose support for the deal is essential. Members of the more radical wing of the coalition, associated with Kirchner and his mother the vice-president, had publicly suggested last week that the country could default on the IMF.
The timing of Kirchner’s resignation is especially challenging as Fernández is scheduled to travel to Russia and China later this week. The government also aims to close the IMF deal before a payment is due to the institution March 22.
Máximo, 44, was re-elected as national lawmaker for the Buenos Aires Province in 2019, and is one of the founders of La Cámpora, a radical left grouping aligned with the vice-president. She has yet to comment on the IMF’s agreement announced by her government.
by Patrick Gillespie & Jorgelina do Rosario, Bloomberg