Guzmán and the president of the Paris Club, Emmanuel Moulin, had agreed a further extension of the understanding reached in June 2021which granted a term to face a new restructuring, in exchange for partial interest payments, and which postponed the negotiation until the end of June.
This pact included financial guarantees from the Paris Club in support of the Extended Facilities program that has a duration of thirty months, and allowed Argentina to secure the financial sources identified in the agreement with the IMF.
The financial guarantees granted establish that, during the term of the program, Argentina will make partial payments to Club members in proportion to those made to other bilateral creditorsin accordance with the terms established in the June 2021 understanding.
President Alberto Fernández, during his recent tour in Germany, met with the leaders of the G7, many of whom have direct weight in the negotiations with the Paris Club.
In particular, Fernández held various meetings with German Foreign Minister Olaf Scholtz; with the President of France, Emmanuel Macron, and the head of the European Commission (the Executive of the European Union), Ursula von der Leyen, among others, with whom he took the opportunity to present Argentina’s position on the debt in question, as prior to the negotiations that Guzmán will face in Europe.
In return, the European leaders expressed interest in putting together a common agenda that includes issues of energy and foodpotential sectors for investment, in a context where it is estimated that the war between Russia and Ukraine will continue.
The government’s goal is to a renegotiation that includes new conditions of interest rates, terms and incorporation of the US$430 million already paid in two payments in February 2022 and July 2021.
“The objective is to find better conditions for the country, as soon as possible. The expectation and what we are working on is to finish the renegotiation with the Paris Club authorities as soon as possible,” Economy sources told Télam.
The date of September 30, 2024 is due to an agreement between both parties, knowing that the Extended Facilities agreement signed with the IMF grants the maximum term, although the goal is to close the understanding much earlier.
Currently, The Government is working on negotiations with each of the creditor countries and with the Club’s authorities to come up with a new repayment scheme.
According to the schedule inherited from previous efforts, Argentina had to face a payment of close to US$2.45 billion on May 31, 2021 -corresponding to 40 loans granted by 14 countries and in eight different currencies- under the terms of the Agreement signed in 2014, which contemplated a grace period of 60 days.
The 2022 agreement allowed debt payments to be postponed until 2024 so as not to fall into default, and to give time to agree on a new interest payment scheme and rate renegotiation, as the Government intends.
The capital balance, terms and interest will be defined in the negotiation in which Argentina is now advancing in parallel with the Club authorities and the 16 member countries, which will be set under the terms of a new agreement, which will no longer have as based on the 2014 understanding.
Source: Ambito
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