The novelty of these weeks is that the National Government ended up recognizing that there is no room for an agreement that does not contain a greater adjustment. Gone are the fantasies of a 20-year payment plan (as Kirchnerism proposed a year ago) or that they were not going to charge us the interest surcharges required by the macrista mega-loan. The agreement will be for 10 years, beginning to pay capital in 2026, but interest will continue to be paid every semester. It was also exposed that the Fund demands a greater adjustment to the already very strong one that the Government of Alberto Fernández has been carrying out: it proposes a “fiscal convergence path” (the new word to hide the more real “adjustment”) where the zero deficit in 2024, while negotiations continue to adjust a little less, and reach said zero deficit in 2027. Let’s be clear: at one time or another, it is about a phenomenal mortgage on the working people, which will be paid by retirees and state employees with the fall in the purchasing power of their income and the working population as a whole with higher tariffs and with the reduction of public works (which will generate more unemployment).
To all this we must add another important element: the Fund requires a quarterly review of the agreement. Thus liquidating the fantasies of some who maintain “let’s sign anything and then not comply with it.” The IMF will send audits every three months, in what will be a virtual intervention of all economic policy. An impressive advance in the already semi-colonized Argentine economy.
In the meantime we keep paying
Perhaps it can be argued that the government’s “tactic” was to lengthen the negotiation without signing anything. But the reality is that it was not free: what was done was to strictly comply with all maturities. In fact, Since the inauguration of the Frente de Todos, 6,359 million dollars have already been paid to the IMF (5,160 of them last year), more than what was put to deal with the pandemic in 2021.
Foreign debt is the mortgage that has been sinking the Argentine economy for decades, paid by all governments, without exception. Payments are infinite: thus, this January, in addition to the maturities mentioned above to the IMF (1,100 million), 68 million must be paid to the IDB, 17 million to the World Bank. To this must be added the 700 million dollars that have already been paid to private creditors, as a result of the maturities agreed in the August 2020 swap.
In short: if an agreement is reached with the Fund, a super-adjustment will come, greater than the current one. And billions of dollars of interest will continue to be paid. And then, in 2026, we will again have a mountain of unpayable maturities. At the same time as the Fund, which viceroy will be the one who will raise or lower the thumb on each decision of our economic policy.
So we have no way out. That is why we insist that the only solution is to break off negotiations with the IMF and suspend all foreign debt payments, in order to direct all resources to meet the most urgent needs of work, salary, housing, health and education. The only way to bet on the reactivation of our consumer market and a true redistribution of wealth.
Economist. Leader of the Socialist Left. Teacher and Researcher at the UBA.
Source From: Ambito
