Business & Economy

Argentina-IMF talks on debt rescheduling going down to the wire

Buenos Aires, Jan 27 (EFE).- Argentina is conducting “intense” talks with the International Monetary Fund (IMF) on rescheduling its $44 billion debt to the international lender on the eve of the deadline to make a $700 million payment, the government said Thursday.

On the streets of Buenos Aires, meanwhile, members of social movements and leftist parties rallied to urge the government to repudiate the debt and use the $700 million to meet the needs of the Argentine people.

“It’s a negotiation. There are moments when it is day-to-day and moments when it is hour-to-hour, as at this moment,” Gabriela Cerruti, spokeswoman for President Alberto Fernandez, said during her weekly press conference.

The conservative administration of then-President Mauricio Macri’s turned to the IMF in 2018 after the Argentine peso plunged against the dollar despite desperate measures that included raising the benchmark interest rate to 40 percent.

Fernandez’s center-left government has spent more than a year trying to persuade the IMF to reschedule repayment, arguing that Buenos Aires lacks sufficient international reserves to meet the original schedule.

With less than 24 hours to go before the $700 million is due, the government has declined to say whether that payment or another in the amount of $300 million that is set for next Tuesday, will be made.

“We will know in the coming hours because everything depends on how the negotiation that is being conducted advances,” Cerruti said. “I can’t give you more details on that issue because, like every negotiation, it is a delicate negotiation.”

Pointing to a 10.3 percent uptick in economic activity in November, she said that the administration is determined to preserve the conditions for growth and will not sacrifice the interests of pensioners, the poor, children or workers.

“The government has a predisposition and a willingness to reach an accord that allows payment in a sustainable manner of the debt that the government of Mauricio Macri contracted with the IMF, which is a problem for Argentina, which will be a problem for many years,” Cerruti said.

Outside the Casa Rosada – the Argentine White House – on the Plaza de Mayo, people protested under the banner “Not one more dollar for the IMF.”

“The external debt is fraudulent, odious and unpayable. Since it took office, this government paid $6 billion: genuine madness in the context of the growing poverty nationwide,” Cele Fierro of the Socialist Workers Movement (MST) said.

With the money Argentina is supposed to pay the IMF within the next week, “we could build 34,000 homes and create 170,000 jobs,” she said.

The chair of the left-nationalist party Libres del Sur (Freemen of the South), Humberto Tumini, likewise labeled the IMF debt as fraudulent.

“We can’t permit that the Fund determines our sovereignty or dictates austerity,” Libres del Sur’s Silvia Saravia said. “So we want a referendum: the people must decide if those millions and millions of dollars should go to the IMF or instead to resolve the urgent necessities of employment, housing, health.”

During the 2003-2007 presidency of the late Nestor Kirchner, Argentina paid off its obligations to the IMF and successfully rescheduled most of the sovereign debt that forced Buenos Aires to default in early 2001.

The origins of the 2001 default, which was then the largest in history and occurred amid a financial meltdown and economic depression, went back to Argentina’s 1976-1983 military regime, which presided over a 465 percent expansion in public indebtedness.

EFE rgm/dr

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