Expenditure on debt interest exceeded for the first time the payment of pensions, which were strongly affected by the Milei and IMF adjustments.

On Thursday afternoon, the visit to Buenos Aires of the first deputy managing director of the International Monetary Fund, Gita Gopinath, concluded. After meeting with Javier Milei, the organization issued a statement highlighting support for the reforms and “macroeconomic stability,” and at the same time urged the government to make efforts so that “the burden of adjustment does not fall disproportionately on working families.”

The official stated that she had meetings with academics, unions, civil society organizations and businessmen; as well as with Milei and her economic team composed of the Chief of Staff, Nicolás Posse, the Minister of Economy, Luis Caputo, and the President of the BCRA, Santiago Bausili.

After the meeting with Argentine officials, Gopinath recognized “the important initial progress in restoring macroeconomic stability and establishing a solid fiscal anchor.” He further highlighted the need for “a consistent and well-communicated monetary and exchange rate policy to continue reducing inflation, rebuild reserves and reinforce credibility.”

The IMF has been demanding a change in monetary policy. After the strong exchange rate jump of 118% in December, the pattern of crawling peg (microdevaluation) of 2% is very far from the inflation of 20% monthly average, which appreciates the exchange rate and exhausts the accumulation of reserves. Given this, the IMF had warned that the BCRA must adopt a “new monetary policy” that avoids a “rapid erosion of the initial competitiveness gain.”

The government has just been defeated with the fall of the Omnibus Law, and the organization sees a lack of political support. Rejection of his adjustment policies is growing, which in a short time pulverized salaries and pensions, generating a growing popular organization and response in the streets. The IMF noted: “Given the near-term stabilization costs, it is essential to make sustained efforts to support vulnerable segments of the population and preserve the real value of social assistance and pensions, as well as to ensure that the burden of adjustment does not fall disproportionately on working families.” For this reason, he called on the government to “work pragmatically to obtain social and political support is also essential to guarantee the durability and effectiveness of the reforms.”

Ignore the debt scam

For the first time, the interest expense on the debt exceeded the payment of pensions by the State. The government’s priority was on a handful of speculators over almost 6 million retirees. The liquidation of retirement assets largely made it possible for Minister Caputo to present to the IMF a fiscal surplus of $518 billion as a symbol of loyalty to the international organization.

Deepening the link with the Fund can only bring worse news for retirees, workers and poor people. While Milei plays at being the “best student” of the fund and the speculators, the union centers continue without calling for a general strike to face the brutal adjustment of the government.

As the fight against the omnibus law demonstrated, the Milei and IMF plan can be defeated if we continue organizing and coordinating the struggles in neighborhood assemblies and places of work and study. Faced with the inflationary blender, urgent measures are needed: emergency increases in salaries, pensions and benefits with automatic inflation updates.

Source: www.laizquierdadiario.com

Leave a Reply