Will the IMF help Argentina avoid another default?

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By: Dominique Baillard Follow

Once again, Argentina's fate depends on the IMF. Experts from the Fund arrived a few days ago in Buenos Aires to assess the request for rescheduling of Argentine debt.

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The mission of the fund's experts to Argentina ends on Wednesday February 19 and the official statement setting out their position should follow. Because, once again, Argentina is unable to repay its debts. Its total slate represents more than 90% of its GDP, it amounts to $ 311 billion, including $ 44 billion paid by the IMF under the chairmanship of Mauricio Macri. His successor, the Peronist Alberto Fernandez would like to restructure the third . Restructuring means postponing or canceling part of the reimbursements.

In this new crisis of over-indebtedness, the institution hated by the population, regularly conspired in demonstrations, is once again part of the solution to prevent history from repeating itself. Let Argentina not be forced into a new default. It would be the ninth since independence. The most recent, that of 2001, is still a painful memory in all memories, those of the Argentines traumatized by the economic cataclysm it provoked, and also in that of the creditors, a minority of them never having agreed to waive their due.

Faced with these scalded creditors, how does the Argentine government do it ?

This time, " it is out of the question to be taken hostage by these lenders, " promised the Minister of Economy. Instead of committing the country to an umpteenth austerity plan, Martin Guzmann rather wants to make the recovery to put his country back on the growth path before starting to repay its debts. The road will be long, very long, since the minister does not forecast a surplus budget before 2026. That is to say beyond the term of the current president. It must be said that the Argentine economy is already in a critical situation with a third consecutive year of recession. 40% of the inhabitants have fallen into poverty and inflation is one of the highest in the world, exceeding the 50% threshold. The director of the IMF, Kristalina Georgevia , also welcomed the first measures taken by the Minister of the Economy to stabilize the economy and protect the poorest.

Will the IMF accept that part of its debt be written off ?

" The haircut is excluded, " said the director of the IMF; it thus cut short this hypothesis launched a week ago by the fiercest opponent to the fund, Cristina Kirchner . When she took over from her husband in 2007, she maintained a break with the IMF until she was driven from power by the election of the conservative Mauricio Macri. She is now back in business as vice-president, but no longer entirely in a position of strength in the team in power. President Alberto Fernandez is trying to play the diplomatic card to get out of the quagmire. He came to Europe to seek the support of Germany or France, countries whose voice counts in the IMF. It remains to be seen whether he has enough time to reach a good agreement with the creditors. He himself set the deadline of March 31, a deadline deemed very short by the protagonists.

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