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"There are fears that the biggest bailout of the IMF's funds will be blows and can not survive an election shock," says the Financial Times, one of the world's most prestigious economic newspapers, in a long note dedicated to Argentina who believes that the IMF plays its reputation with the mega-deal.
"When the IMF completed its third review of the Argentine economy in early April, the CEO, Christine Lagarde, touted the fact that government policies related to the record bailout of $ 56 billion dollars "were bearing fruit," says the publication. . He adds: "Less than a month later, in the face of President Mauricio Macri's bleak political outlook, the country's monetary crisis has been revived and bond yields have risen, threatening not only the IMF's program in Argentina, but also its reputation and that of its leader ".
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"Argentina's badets have stabilized a bit in recent weeks, and the country's central bank is now allowed to use IMF resources to intervene in pesos, but many badysts and investors are worried that the program weakens and could collapse if the populist opposition, led by former left-wing President Cristina Fernández de Kirchner, wins the elections presidential election in October. A victory it would be devastating for the IMF given his strong support for Mr. Macri. "
The newspaper quotes Bill Rhodes, a former Citi executive with experience in debt management in Latin America, for whom "it is the largest individual program that he has presented (the IMF), and his reputation is at stake. "
Even former senior fund managers worry about the organization's exposure to Argentina and the possible consequences of the implosion of its larger program, the newspaper said. .
"Lagarde really risked Claudio Loser, former head of the department for the Western Hemisphere at the IMF during the history of Argentine debt failures in 2001, said Claudio Loser. "loss of credibility" for the bottom, he adds.
According to the article signed by reporters Colby Smith and Benedict Mander, "the plans have already deviated significantly, Macri having been forced to return to the IMF to renew the agreement just three months after the presentation of the Initial agreement in May. Last year, in September, the IMF announced that it would lend an additional $ 7.1 billion and would allow the country to receive a cash advance in exchange for a program of austerity more severe. "
"The agreement required that Argentina implement a balanced budget for 2019 and reduce its external deficit, in both cases the country has succeeded." The article highlights the main problems related to inflation and poverty.
Journalists also pointed to the tumultuous relationship between Argentina and the IMF. "Few people forget the disastrous end of the IMF's latest program when, just two months before the country failed to meet its obligations in 2001, the country borrowed an additional $ 8 billion, most of which had been used to buy money. pesos to institutional investors who wanted to leave Argentina ".
For that, underlines the flexibility shown by the Fund and the support that Mauricio Macri recently expressed to the agency and Donald Trump.
"We are working with the authorities to overcome the current difficulties, which requires flexibility to adapt as circumstances change to maintain the core objectives of the program," said an IMF official.
Macri's approval ratings have dropped with the economy. However, according to Mark Sobel, a former senior US Treasury official and executive director of the IMF, "staying on the path of the fund program is your best option to beat Fernandez (Kirchner) if she decides to run for office."
"If this program is implemented, Argentina will recover," he said. "But if Kirchner wins and we see a return to the unfortunately wandering policies of her and her husband, many will blame the Fund and its reputation will suffer," concludes the article.
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