The Minister of Economy, Luis Caputo, and the Chief of Staff, Nicolás Posse, received this Monday the IMF team led by Luis Cubeddu and Ashvin Ahuja that arrived in the country last Friday. Among the topics discussed were reserve accumulation and exchange rate managementcentral axes of the breaches of the agreement signed with the international organization.
The Government’s objective is to obtain the “waivers” (“pardons”) for the failure of Sergio Massa in trying to comply with the demands of the Fund and thus achieve the return of the periodic disbursements that were agreed with the Monetary Fund. The State has failed to meet the different goals set out in the agreement reformulated in the negotiation carried out by Martín Guzmán, both with regard to the accumulation of reserves and the fiscal imbalance.
The president repeats over and over again that the Government’s plan is to carry out a fiscal adjustment program more severe than that proposed by the IMF, since it plans to achieve not only primary balance (before interest payments) but also financial balance during the course of this year. He Banco Central had already stated in a document that the government’s intention is to request a waiver for the “non-compliance” alreadyadjust the goals to “clear the uncertainty around the agreed disbursements with a view to meeting future capital maturities”.
Immediately after the winning result of the runoff for Milei, the head of the IMF, Kristalina Georgieva, expressed her support for the La Libertad Avanza leader and after Luis Caputo’s announcements about a strong devaluation taking the official dollar to $800 and a brutal adjustment, The Fund also welcomed the adjustment measures. However, From Washington they still distrust the new management’s ability to succeed with its neoliberal measures.
Fund officials are not the only ones who doubt, The so-called markets that reflect the expectations of the big capitalists began to give clear bad signals to the government this Monday. The dollar counted with settlement climbed $60.22 (+5.3%) to $1,200, its new nominal record at the close. Meanwhile, the MEP dollar increased $36.69 (+3.3%) to $1,140. Dollar bonds returned to the negative path, so the country risk once again crossed the 2,000 point barrier. Caputo’s financial tranquility seems to have lasted barely a month and the deep problems of the Argentine economy appear again.
The need to reach a new agreement with the leaders of Kristalina Georgieva is urgent for the Government. The State must face the cancellation of debt with the IMF for US$ 1,915 million in January, US$ 763 million in February and another US$ 1,915 million in April. The devaluation, the DNU and the omnibus law are a harsh attack against workers, retirees and their families, but to gain the trust of big businessmen and international capital Milei and Caputo are preparing to continue deepening the adjustment.
The agreement signed with the IMF implies the country’s dependence on the interests of the United States and other dominant countries, continue paying a fraudulent external debt from its origin and applying economic recipes that have always led Argentina to heartbreaking crises. The consequences are clear: increased poverty and unstoppable inflation.
The left is organizing to confront these plans. Making that him general strike of the 24th of this month has an active and combative character, it can be a key step in achieving launch a counteroffensive against the attacks of the Government and the Monetary Fund.