Alberto Fernández asked the IMF for more time and resources for Argentina: “It should not be that difficult to review the payment terms”

President Alberto Fernández today called for the International Monetary Fund (IMF) to provide more assistance and time to middle-income countries like Argentina to pay off their debt.

The Head of State indicated at the opening of a new session of the Economic and Social Council, that this debate must be given “on the basis of the emergency that we are living”, taking into account the fact that poverty in the suburbs exceeds 50%. Therefore, he indicated that not only poor countries should be helped by international organizations.

“I aspire to review everything, to review the rates and the debt payment deadlines “, said the president of Olivos’ residence, where he is recovering from the coronavirus. Immediately he clarifies that it’s not about not paying, but about changing the way of doing it, which would be a kind of revival of the failed idea of ​​the 80s moratorium, launched during the lost decade of Latin America.

In the case of Argentina, the idea was strongly defended during the government of Raúl Alfonsín, particularly in the management of the minister Bernardo Grinspun and, less vehemently, by his successor Juan Sourrouille.

“It shouldn’t be that hard to review the payment terms. It is a debate which deserves to be given, not only by Argentina ”, he underlined.

Fernández expressed the hope that this debate will progress, through the expressions of the general director of the Fund, Kristalina Georgieva, who however clarified that these charges were justified and that their reduction will not be easy.

The opening was in charge of the president and the closure by the minister Martin guzman. At the third plenary meeting of the Conference of European Statisticians, the approach to food and nutrition coverage, the issue of the public works system, education and work in the future will be discussed first. Among others, the union member of the UOCRA Gerardo Martinez and the head of the Construction Chamber, Iván Szczech.

Then they talked about “Special Drawing Rights and the New International Financial Architecture”, that is, the IMF currency, given that this year there will be an expansion of $ 650,000 million, some $ 4,300 million of which may reach Argentina in the last quarter.

This week, the governments of Argentina and Mexico demanded that additional SDRs that reach richer countries and are not used become part of a “common fund” so that they can be used by countries. middle income; In this way, Argentina could have more resources to pay off its debt and stabilize its economy while still not having access to the capital market, unlike most countries in the region.

The Managing Director of the Fund, Kristalina Georgieva, expressed satisfaction with the additional distribution of SDRs and clarified that the possibility suggested by Argentina and Mexico should be discussed by all members of the organization, first at a general level and then in each country .

After the President’s opening remarks, the Columbia University economist spoke Jeffrey Sachs on “Reconstruction of the global financial architecture to achieve a more sustainable financial system and a more just world” and then the head of the Ibero-American General Secretariat, Rebeca Grynspan, on “Latin America’s challenges in the era of Covid-19: over-indebtedness of countries in the region and mechanisms to strengthen the role of development banks in the region”.

In his thesis, Sachs was in tune with the words of the President and the Minister, considering that, given the depth of the current crisis, a new Bretton Woods conference is needed, like the one that gave birth to the IMF and the World Bank, to rebuild these institutions, adding China for its clear role at the global level. In addition, he felt that the Paris Club should forgive the country almost all of its debt to official creditors.

Meanwhile, Grynspan said that “We are in a war economy, against the pandemic” and considers that this situation is very different from the previous crisis, of 2008-2009, because of its devastating global nature, in particular because it affected more emerging countries than those of the G7.

Thereafter, the analyst Eric LeCompte, promoter of the Jubilee, mentioned “The architecture of the debt of special drawing rights (SDRs): beyond the pandemic, prevention of the financial crisis and overcome economic crises with resilience” and then it will be the turn of the secretary general of Cepal, Alicia Bárcena, who will refer to “International Liquidity, Debt Sustainability and Financing for Development”.

Finally, the meeting will be closed by Minister Guzmán, who will leave tomorrow for Europe to meet his German, Italian, Spanish and French counterparts on the negotiations for postponing the payment of the Argentine debt with the IMF and the Paris Club, which they total. about $ 7.5 billion in capital this year.

Previously, Guzmán participated in the plenary meeting of the IMF Committee, where he specifically reiterated the need to apply relief measures for middle-income countries, in the context of the effects on the economy generated by COVID-19.

“75% of the world’s population lives in middle income countries and 62% of the poor people live in middle income countries. These countries are also suffering greatly from the current crisis and do not have the instruments available to advanced economies. Therefore, it is important not to forget this group of countries, ”said Guzmán.

Regarding SDRs, the Minister reiterated that “Argentina strongly supports the new general allocation in the amount of $ 650,000 million, as it will help provide developing countries with much-needed liquidity.” “It is important that we find the mechanism to reallocate unused SDRs to countries in need, not only to low-income countries, but also to middle-income countries, ”he said. In addition, he referred to “the importance of IMF technical assistance in subsequent sovereign debt restructuring processes”, and recalled that “Argentina has restructured its debt to private creditors in 2020”, although that currently these bonds have lost almost all of their value and the country risk around 1600 basis points.

“At the start of the negotiations, we requested technical assistance from the IMF and the analysis carried out contributed to a more orderly and entrenched sovereign debt restructuring process,” Guzmán added. In addition, the minister asserted that “it is very important to review the policy of access limits and surcharges of the IMF” as it “penalizes countries in the most adverse circumstances, is regressive and pro-cyclical, as stated in the G-24 communiqué “.

“This policy must be reviewed and, in the meantime, a suspension of surcharges would help countries in difficulty.”

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