US official expresses support for 'solid' Argentina-IMF agreement

The United States government's top Latin America advisor says the White House wants to see a "solid" agreement between Argentina and the International Monetary Fund (IMF) to facilitate the country's return to the international financial system.

Juan González, the White House's senior advisor on Latin America, stressed the importance of Argentina's stability for the United States in a conference call this week and said he is "optimistic" regarding a deal.

Speaking during a call organised by the Eurasia Group, González said that negotiations with the IMF offered an "opportunity to turn the page of 20 years, and reaffirm the value of the Bretton Woods institutions and bring Argentina back into the financial system."

González pointed out that "the way in which Argentina resolves its relationship with the IMF will send a powerful signal to emerging markets that are themselves going through very problematic economic crises."

The Senior Western Hemisphere Director for the National Security Council even ventured that the agreeing of a new programme with the multilateral lender could be beneficial for bilateral relations between Argentina and the United States.

Argentina is seeking to replace the three-year stand-by agreement for US$57 billion granted in 2018 to the government of former president Mauricio Macri (2015-19), of which US$44 billion has been disbursed. After taking office in December 2019, President Alberto Fernández refused to accept the rest of the loan.

The nation's current agreement obliges the repayment of maturities in 2022 and 2023 worth more than US$19 billion each year, with another US$5 billion due in 2024.

Argentina, the IMF's biggest debtor, has been in recession since 2018 and is seeking to renegotiate its debt following a 9.9 percent collapse in GDP last year. Officials are seeking an Extended Fund Facility programme that would allow deadlines to be postponed and lengthened.

Discussing the potential sticking points in negotiations over a new deal, González said that the IMF "has learned that you cannot always use a model to prescribe macro policy in a political environment."

He concluded: "You have to recognise the domestic context, the endowment of factors, at the end of the day the Argentines have to come up with a plan."