Within the framework of the annual summit of the International Monetary Fund (IMF), held in Washington, Argentina has begun to discuss the implementation of a new program with the organization, which could include the possibility of increasing the debt. The Minister of Economy, Luis Caputo, confirmed this Wednesday that he is in dialogue with the IMF for a new agreement that includes “fresh funds”, although he admitted that “it will be a long process.”
A new pact with the Fund means a new mortgage for the country that includes greater adjustment and counter-reforms, with the objective of paying an illegal and illegitimate debt that did not generate any benefit for the majority of the population. The body chaired by Kristalina Georgieva congratulates the Government for the budget cut made, but demands a long-term plan and a devaluation of the currency.
“We are evaluating a new program that would serve to consolidate the policies we are implementing. The additional money could relieve the Central Bank’s reserves, but we are just beginning the conversations and it will be an extensive process,” the minister said. The “reliefs” for Caputo usually transform into the exacerbation of the deep contradictions of the Argentine economy and the worsening of the social situation.
Regarding the possibility of obtaining additional financing, Caputo was cautious: “There may or may not be new funds, it will depend on the type of program we agree on. The most logical thing would be for it to include financing, but it is difficult to predict how much money will be available. The negotiation will take time.” , he explained.
One of the factors that condition the position of the IMF are the presidential elections in the United States, the country with the greatest influence within the organization. If Donald Trump wins, Milei hopes that this will translate into a credit for Argentina, despite doubts about the exchange rate policy, the sustainability of the fiscal adjustment and the political consensus necessary to implement it.
So far, a formal meeting between Caputo and the top authorities of the IMF, represented by Kristalina Georgieva and Gita Gopinath, has not been confirmed. “We will meet in the coming days,” declared the minister. But Caputo does not waste time, this Wednesday he held a closed-door meeting with 200 bankers, investors and financial advisors in the third basement of the Marriott Marquis hotel, where he explained the Government’s plans in relation to the foreign debt; with the aim of searching for other possible lenders.
Negotiations with the IMF cooled down after Caputo’s last meeting with Georgieva in July, during the G20 summit in Rio de Janeiro. The IMF continues to demand a more flexible exchange rate, the unification of the exchange market and the elimination of the exchange rate. The Government wants to avoid that path due to the inflationary dangers, the central flag (if not the only one) of its speech.
The Fund celebrates the fiscal adjustment of Milei and Caputo that fell heavily on retirees, students and workers, but the Government’s policies slowed economic activity and pushed the economy into recession. The consequences are an increase in poverty and unemployment. With the income from the floor, consumption will not be reactivated and the lack of dollars will also slow down activity. Students, health workers and retirees are already facing state budget cuts hard. If the Government’s path remains tied to the IMF, the struggles will only multiply.
Source: www.laizquierdadiario.com
