The technical talks with the Paris Club have already begun and the Executive aims to close an understanding before June 30, date agreed upon as a frame of reference with the body itself. A technical team from the Ministry of Economy (headed by the Undersecretary of Financing, Ramiro Tosi) is working on the preparation of the legal framework to reach a new agreement with that group of creditor countries.
Once the technical understanding has been reached on repayment terms and interest rates, which should be in line with the characteristics of other bilateral commitments of Argentina, another stage will open. There, the Government will negotiate in person with the 14 creditor countries that are part of the Club. With each of them, specific bilateral agreements will be signed. If the result of the negotiations establishes payments for the second part of 2022, the Extended Facilities program foresees that these currencies will be deducted from the net reserve accumulation objective established with the IMF at US$5.8 billion for this year, they assured from the Executive.
The objective of the new decree is rather to clear up formal doubts regarding the possibilities of incurring a default, since this Tuesday, May 31, was the date on which the maturities with the Paris Club were still registered.
According to official sources, The DNU provides for “the deferral of the payments of debts contracted by virtue of the signed Bilateral Agreements, until the existence of a new framework agreement and the adequacy of the bilateral agreements signed in its consequence, or on September 30, 2024, the operate first”.
The debt with the Club goes back several decades. In 2014, then-minister Axel Kicillof sealed an agreement to refinance close to US$10,000 million over five years, extendable for two more years (although with a surcharge on the interest rate, which after the default of the Cambiemos government reached 9% per year). In 2021, Guzmán negotiated a time bridge to 2022 for the remaining $2.4 billion remaining at the time. Since then, the Government has canceled US$430 million.
Within the Paris Club, Argentina’s main creditors are Germany (37%), Japan (22%), the Netherlands (close to 8%), Spain (6.7%), Italy (6.3%) and the United States. (6.3%).
Source: Ambito
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