Report by Liliana Franco.-
A delegation from the Ministry of Economy travels to the United States on Tuesday to advance negotiations with the IMF seeking to close an agreement for Argentina’s debt.
The officials who travel to Wasghinton are the Secretary of Economic Policy of the Palacio de Hacienda, gabriel rubinsteinthe chief adviser to the Ministry of Economy, Leonardo MacurVice President of the Central Bank, Lisandro Cleriand the director of the monetary entity, Pablo Manuel Carreras Mayer.
For the first time since taking office on May 1, the IMF’s Western Hemisphere director Rodrigo Valdes will negotiate face to face with the envoys of the Argentine Government.
What is the IMF asking for?
the line of IMF go on insisting on the need to carry out austerity measures, while the minister Sergio Massa is not willing to put economic activity at stakeas they point out in their environment.
One of the central aspects of the Argentine requests is for the country to obtain additional funds. In principle, it is estimated that the IMF could send -once the agreement is concluded- about US$2,000 million– plus the stipulated repayments.
As anticipated by this medium, one of the points under discussion is that the inspection of the organism should be annual and that the country is not judged for not having met the goals taking the period of the first semester, but as an annualized calculation.
The fiscal policy is another controversial issue. The technicians do not accept the request of the economic team to raise the fiscal deficit target for the year by around 2.5% of GDP. On the contrary, had raised the need for a reduction to 1.6% of the primary imbalance.
The solution to which they would be arriving would be intermediate: maintain the 1.9% stipulated in the agreement, despite the fact that the drought also had an impact on tax revenues. This goal of 1.9% -in itself demanding-, implies a strong restriction of public spending that is difficult to meet in the middle of an electoral process, a presumption shared by the multilateral organization.
What did Sergio Massa say about the agreement with the IMF?
After the inauguration of the Nestor Kirchner gas pipeline, which served as the launch of the campaign of the Union for the Homeland (UxP), the Minister of Economy Sergio Massa visited the studios C5N and anticipated that “we are very close to reaching an agreement with the IMF”, in reference to debt negotiation.
Massa, who was in Salliqueló, where he participated in the commissioning of the first stage of the gas pipeline together with Alberto Fernandez and Cristina Kirchner, among other leaders, offered an interview for the program Peronismo Para Todos hosted by Dady Brieva. “The biggest trap that Argentina has is the debt with the IMF. That trap limits you too much. And then came the drought, which, from one day to the next, took us $20 billion out of the $100 thousand that we were going to bill as a country,” said Massa.
Sergio Massa met his team before they travel to Washington
This Monday morning the minister met his team behind closed doors. There they analyzed the advances in the negotiations with the IMFin order to achieve the signing of the agreement by which the payments of the three maturities in July, for a total of US$2.6 billion, will be made unified at the end of the month. The objective is, in parallel, to close the renegotiation with the credit agency.
Unifying the times brings a relief to reserves outlook of the Central Bank of the Argentine Republic (BCRA). According to estimates by the consulting firm Ecolatina, the entity’s net reserves are in negative territory due to US$5.300 million.
The mechanism of postponing maturities until the end of the month has already been done on other occasions. The last one was in June, when the Government ended up fulfilling its obligations to the multilateral organization with a remainder of Special Drawing Rights for the equivalent of US$1.7 billion that remained in the reserves and with “freely available” yuan that were obtained by exchanging currencies with China for US$1,000 million.
When the Argentine entourage arrives in the US, an arduous week of work is expected. as anticipated Ambit, the talks will not end this Friday. In the best of cases, it will take one more week, the twelfth, for the Argentine case to reach the top of the IMF and then the Board, where the type of relationship that the country will maintain with the Fund will be finalized.
In negotiations, “everyone plays make-believe,” they say in Washington. In fact, the agreement to be reached will last only until December. It is that, in the organism they know that it will be necessary to “shuffle and give again” with the new government.
Source: Ambito
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