Wednesday, June 19, 2024

ECONOMY | 28-01-2022 10:53

President Fernández announces new IMF debt financing deal

"I want to announce that the government of Argentina has reached an agreement with the International Monetary Fund," announces President Alberto Fernández.

After months of negotiations, President Alberto Fernández on Friday morning unveiled a new debt repayment deal with the International Monetary Fund, the day a US$700-million payment fell due.

"I want to announce that the government of Argentina has reached an agreement with the International Monetary Fund," said the Peronist leader in a video filmed from the garden of the Olivos presidential residence.

Declaring that the deal with the multilateral lender would "put the present in order and build a future," the president did not reveal details of the new financing programme in a short address.

Argentina was due this year to pay back US$19 billion of its US$44-billion debt to the IMF. Fernández said that the country had been living with "a rope around its neck, a sword of Damocles, and now it has path it can follow." 

"Without an agreement, we had no horizon for the future. With this agreement, we can put the present in order and build a future," said the Frente de Todos leader.

Fernández gave no details about the new agreement, saying only that "compared to previous ones Argentina signed, this deal does not contemplate restrictions that would postpone our development."

He added: "It does not restrict, limit or condition the rights of our pensioners. It does not force us to carry out labour reform. It promotes our investment in public works. It does not impose us to reach a zero deficit."

"It does not impact on public services, it does not relegate our social spending and it respects our plans for investment in science and technology," he declared.

The head of state called on the opposition to back the agreement in Congress, as he criticised his predecessor in office, Mauricio Macri, without naming him.

"We need them to support this agreement and I appeal to the national commitment of all of us," said Fernández.

"History will judge who did what. Who created a problem and who solved it. I invite you to look forward without forgetting the past," he added.

Macri originally agreed a US$57-billion loan with the IMF in 2018, but when the Fernández government took office a year later, the Peronist leader refused to accept the final US$13-billion disbursement.

After successfully restructuring a US$66-billion debt with private international creditors in 2020, the government began negotiations with the IMF to delay repayments.

Argentina has been in recession since 2018. The economy grew by around 10 percent in 2021, following a 9.9 percent slump in GDP in 2020 amid the coronavirus pandemic.

"There was a very serious and urgent problem and now we have a possible and reasonable solution. It is time to unite in the solutions and not to divide over the problems. I have confidence in Argentina," he concluded.

Details of the new deal are expected to be divulged later Friday by Economy Minister Martín Guzmán. Under the previous deal, Argentina would have to repay US$19 billion this year, US$20 billion next year and another US$4 billion in 2024.

The government had repeatedly said the repayment schedule was unsustainable given their lack of reserves, and was pushing for a restructuring of the repayment schedule.

"This understanding plans to sustain the economic recovery that has already begun," said Fernández on Friday.





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