Buenos Aires (AFP)
An International Monetary Fund (IMF) mission is going to Argentina on Wednesday to discuss a restructuring of the debt contracted with the organization, a rescheduling presented as essential by President Alberto Fernandez to get his country out of the rut.
This is the first IMF mission since the new head of state took office on December 10, 2019, replacing the liberal Mauricio Macri (2015-2019) who had negotiated a loan of $ 57 billion from of the financial organization.
For the new president, a center-left peronist, the debt is not repayable until the country, hit hard by inflation, unemployment, increasing poverty and economic recession, does not find the path to growth. For this, he asks the creditors time limits to repay.
The government is thus seeking to renegotiate with multilateral organizations and holders of private bonds a total of 195 billion dollars (57% of the GDP), including 44 billion disbursed by the IMF.
Argentina has indeed only touched 44 billion on the total loan from the IMF: faced with the deepening of the crisis, Alberto Fernandez had quickly announced that his country would give up the last tranche of the loan.
At the same time, the Minister of Economy Martin Guzman will present to Parliament on Wednesday the government's strategy in the face of the debt.
"The meeting with the IMF will allow us to start to see what is the economic program of the government. The creditors need to know it to know what is the margin of payment of Argentina", explained to AFP the economist Hector Rubini, from the University of Salvador de Buenos Aires.
"Beyond statements (by Fernandez) on his willingness to pay, so far the government has lacked clarity regarding crucial political decisions," said the risk assessment agency Verisk Maplecroft.
- "Good arrangements" -
The Argentine Minister of Economy has already met with IMF representatives on several occasions, and Alberto Fernandez has just completed a tour of Europe to obtain support for restructuring. So far, the Argentine government and the IMF have expressed satisfaction with their exchanges.
"The IMF is showing good disposition because it wants to be paid and also because it has contributed in part to this situation," said Hector Rubini, in a reference to the $ 57 billion loan, the largest ever granted to a country by the financial body.
Faced with the closing of the markets, the Argentine government must act quickly to reach an agreement by March 31, because payment deadlines would then become difficult to bear.
For economist Marina Dal Poggetto of EcoGo, "there is room for a win-win negotiation, but the problem is that it is dragging on." "The best agreement is one that intervenes quickly," she said.
For 2020, principal and interest repayments reach $ 34.3 billion. Hector Rubini estimates that over the next four years they will represent some $ 200 billion.
Argentina's international reserves are currently $ 44.68 billion.
Buenos Aires proposes to present its rescheduling offer to creditors in mid-March.
"Negotiation is simultaneous with the IMF and with bond holders (...) At one point, they will all have to meet: the Argentine authorities, IMF technicians and groups of creditors", underlines Mr. Rubini.
Argentina, which experienced a historic default of $ 100 billion in 2001, is struggling to remove the specter of default.
She has escaped it so far, although the debt to local law bond holders was renegotiated last year by the Macri government.
On Tuesday, the government announced the postponement until September 30 of the payment of a double bond issued in 2018 and which expired on Thursday, after the failure of an exchange with other securities and that of a new bond loan.
"This debt issue must be resolved, because either Argentina is recovering economic growth, or it is experiencing a new social explosion," predicts Mr. Rubini.
© 2020 AFP