Let's change looks to seduce the IMF with a strong plan for 2019 adjustment

The Macri government would receive a large portion of disbursements before the elections. In return, Christine Lagarde expects progress in the reforms of employment and pensions.

February 9, 2019

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We do not know if the courses will start or not in March, but we know that the government of change study the best way to approve his next exam with the International Monetary Fund (IMF). Next Monday, the team headed by the Italian Roberto Cardarelli arrives in our country to proceed with the third revision of the confirmation agreement, in order to badess the conditions of the next disbursement of the 39; money. Two big questions appear in this context; On the one hand, with what subjectivity, good eyes, will the IMF evaluate Argentina? From the other Will our country ask for some "closures" to be relaxed as we are in the election year?

Let's remember some elements to put us in context. The restructuring of the Stand-by Arrangement last October allows IMF technical staff, whose maximum responsibility is to Christine Lagarde, to evaluate and disburse the different amounts of the agency with Argentina. That is, the political body of the IMF is not involved in these steps, which leaves greater freedom for the government to negotiate with the government. executive counsel. In turn, it has been possible to increase the loan amount from $ 20 billion to $ 56 billion and to advance the bulk of the loan in 2018 and 2019. In fact, the timetable for revising and disbursements for this year, it is quite comprehensive: March 15, the third revision is published and $ 7.6 billion will be granted on June 15, an additional $ 5.4 billion on September 15, 5.4 billion additional and December 15, only 975 million. That is to say, a large part would arrive before the presidential elections of October this year.

It may be worth recalling what the IMF said in its second technical report issued in December 2018. At the press conference, where the $ 7.8 billion transfer had been reported to Argentina, David Lipton (member of the executive of the institution), commented that already in early December the results of the new consensual policies had been observed, namely zero growth of the money supply and a primary budget deficit no; but he also stated that it is found "important to continue to eliminate distortions in the tax system, to improve labor market regulation, to put the pension system on a path to financial sustainability and to strengthen governance"

That is, it is clear that the IMF expects problems such as: flexibilisation of work and the modification of the financing of the Sustainability Guarantee Fund ANSES, including the reduction of employer contributions, as well as other tax reforms. These topical issues are certainly not included in this first review, which examines the progress of the government until December 2018, but they appear to be two fundamental elements on which the discussion between Dujovne and Lagarde will take place. ;articulate. Perhaps this is why, these days, we have already heard rumors that the government would be willing to ask for a waiver, the elimination or postponement of certain clauses, so that the labor reform and pension reform should not be processed in 2019. That is to say that two letters will be approved waiver this would allow Macri to continue to say that he is worried about the retirees and not about fighting with the CGT. But again, this should be used to show the real economic agenda behind the yellow balloons.

If, already in the second report, they recognized the merits of the government in managing the crisis, it is to be hoped that the "subjectivity" of the IMF will lead them to recognize as positive that a new monetary exchange does not not seen the day. the costs are the destruction of the real economy. It is genuinely absurd to see how an economic team is praised for exacerbating an economic recession: 20% drop in construction and more than 14.7% in the sector in 2018, with more job losses 100,000 workers. in this last sector. And if the problem was inflation, it does not seem to be under control, private consultants are already expecting inflation to exceed 2% per month in January.

However, it is highly likely that the technical staff, Lagarde and his team, are playing for the government with which I signed the stand-by. In a way, the fund itself understands that if the opposition wins, it will ask to review the agreement in favor of the majorities, and that does not seem to want. It is clear that the very brutal interference of the IMF in its disbursement schedule and in the approval of the government of Cambiemos shows the challenge posed by the upcoming elections. To preserve the democracy of our country, it is essential that the IMF come out and that we are the Argentineans who define our public policies, which is only possible if we remove Cambiemos from the Rosada.