Both will meet in the next few hours in the United States, in the last stages of the tour of the Minister of Economy and his team, in days where relations must be closed both with the IMF and, as this newspaper stated, with the North American Treasury . In the case of the Monetary Fund, it will be with Goldfajn that, seriously, it will have to reason, negotiate and close the next steps in the direct relationship between the country and the financial institution. And, consequently, it will be at this meeting that the future of the Extended Facilities will be defined, the approval of the first semester (something that will be announced on this same trip), the way to apologize for what happens in the second and, fundamentally, what might happen to the deal in 2023.
The parties know, and this is how it was (just in case) made explicit in the setting up of the agenda of the Minister of Economy by the United States, that it is with the Brazilian-Israeli with whom one must speak, yes or yes, to find out what will happen to relationship with the IMF in the future. And it is also known that the international official is not in a very good mood with Argentina. It will be Massa’s task to change it, something that would not be difficult.
The information that the Argentine team has is that the Brazilian has every intention of beginning to get along with the people of Massa, and that the first signs that came to him from the measures that were taken in Buenos Aires (especially segmentation and readjustment of expenses) were auspicious. But now Massa and Goldfajn will have to face the most important discussion. The one from the future.
Both already know what they will ask for in this regard. The Argentine, that the remaining mission of 2022 be carried out as late as possible and that it be as discreet as necessary. And let it be approved. The Brazilian-Israeli will demand that the goals for the next financial year be maintained (especially the deficit of 1.9% of GDP), something that the minister will surely guarantee at the meeting in Washington. In short, if all goes well, the next important meeting between the two should not be until the beginning of 2023. And until then, everything should be part of a mutual and respectable “gentleman’s agreement”. Both sides believe it is possible.
As Goldfajn himself explained in public, his intention with the country is not to be empathic with Argentina, but to fulfill the mandate given by the Fund’s board to be a relentless inspector of Extended Facilities and its strict compliance. The IMF board gave him this order on March 25, in the complicated session in which the highest level of the organization managed by Kristalina Georgieva unanimously approved the agreement with Argentina. But where two specific countries, Germany and Japan, were very harsh in their references to the reality of the local economy, and demanded maximum tension and analysis from the IMF technicians for the fulfillment of the goals set in the agreement.
It was the board that ruled, in addition, that there be an advancement of the inspection missions, starting in May and adding one more trip to the 10 originally scheduled. That day the Fund spoke of “exceptionally high risks”, a euphemism to say that it is considered very difficult for the country to comply with. Given the panorama, the financial organization dictated to the managing director for the Western Hemisphere the specific mission of executing the application of “Article IV” of the organization before Argentina, which implies that it is the main person responsible for controlling that the goals of the Facilities agreement Extended are met.
Now it will be Massa’s task to convince the strong man of the Argentine case in the IMF (empowered by the Board, who has more imposition than Georgieva herself), about the possibility that the signed goals are still defensible. He is a man of good treatment, friendly, very knowledgeable about Argentina and its chronic political problems, but a lover of fiscal prudence, monetary solvency and long-term plans. He was chosen by Georgieva herself in September 2021 from a long list of contestants in one of the most important positions in the IMF. It was never made public, but in Buenos Aires it is known that the agency’s managing director opted for the Brazilian, since he knows the Argentine vicissitudes.
Source: Ambito
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