The IMF and the Paris Club in the crosshairs | Economic objectives …

The trip to Europe which will begin this Sunday, during which President Alberto Fernández will be accompanied by the Minister of the Economy, Martín Guzmán, has strong economic objectives. One of them is to seek agreements in the different countries they will visit -Portugal, Spain, France and Italy- to negotiate with the IMF, and another is to postpone the maturity of a loan by 2, 5 billion dollars with the Club of Paris which for the moment it is dated at the end of May. In dialogue with Page 12 Sources from the Ministry of the Economy stressed that Guzmán’s position, with regard to the speed of the agreements, is clear: “we are looking for an agreement that is good for Argentina and not a quick agreement”.

Relevant information in this regard is the plan presented by a group of seventy Democratic lawmakers to the United States House of Representatives, in which they called on the White House to demand that the IMF suspend payments of the debt of countries that negotiate liabilities, among which is Argentina, until the end of the coronavirus pandemic.

In addition, our country will receive this year funds from the IMF called Special Drawing Rights (SDRs) that the organization will issue to its member countries to deal with the pandemic. It is around $ 4,700 million, since the agency will grant a total of $ 650,000 million and Argentina’s participation in the Fund is 0.67% of the total. It is estimated that this disbursement will arrive in August, when the relevant formal conditions for its definition in the international organization will be met.

The bank of Frente de Todos en Senadores, in this sense, presented a project in which it calls for the SDR to be used to finance the implementation of public policies aimed at solving the serious problems related to the COVID 19 pandemic in terms of health, poverty reduction, education, housing, job creation, among others. The project is accompanied by the demand that there is no possibility that these funds will be used to pay interest on the debt. This would be possible if the terms of the new credit facilities met what emerges from the very wording of the proposal: that they are funds intended to deal with the pandemic.

Parisian club

In May, one of the deadlines with the Paris Club falls. According to sources from the Ministry of the Economy, what Minister Guzmán did on the previous trip was to garner support and bring about agreements with the most powerful countries in the West, members of the IMF and whose creditors of the Paris Club are also. As assessed from the portfolio, the goal of the previous trip has been met and in this new tour, the government will seek to take the accords to the presidential level and deepen the ties.

During his trip in mid-April through Germany, France, Italy and Spain, Guzmán met the president of the Paris Club, Emmanuel Moulin, and asked him, given the proximity of deadlines in May, the possibility of a bridge time for Argentina to extend the negotiation deadline. As stated in the portfolio, an agreement was reached and the organization’s interlocutors expressed that they were going to hold a meeting to convey this idea to the rest of the organization members to have a feedback, which they felt. they will know during this tour. In Guzmán’s environment, they stress that the main thing is that this proposal has been presented, that it has been listened to and taken into account. All that remains is to see the results and hope that the May deadlines can be postponed, at least, for a few more months.

With the IMF

Another task of Guzmán is the possibility of negotiating a mechanism similar to the so-called “trigger clauses” to now close an IMF program and, if later the Fund introduces changes in its statutes that improve conditions for debtor countries. , Argentina can jump into a new program to access the benefits.

Currently, there are two programs at the IMF: the stand by – the agreement with the Fund concluded by former President Mauricio Macri for $ 57 billion and of which some 44,000 have been disbursed – and the extended facilities which, according to its statutes , give ten years to pay off the debt.

It is very difficult for the Argentine government to be able to modify in the short term the conditions or the statutes of these programs, which are over 70 years old, and thus have more time to pay. Therefore, Minister Guzmán’s idea is, on the one hand, to go ahead and try to reach an agreement within the framework of the extended installations program, and on the other hand to work on changes in financial architecture.

If this is achieved, the goal is for the country to be able to adopt them. It is a kind of small print that will allow the country to benefit from a change of status in the future, even if it has already signed the agreements.