These are the reforms that the IMF will demand of the future government

A prominent Argentinean economist, well-informed about agency corridors in Washington, said that since her appointment as head of the fund, Kristalina Georgieva had asked to be detailed in the agreement in force with the agency. ;Argentina. The Bulgarian economist has already had his first approach at his recent protocol meeting with Minister Hernán Lacunza.

But he knows that the relationship with his main creditor – Argentina concentrates no less than 60% of loans granted to the IMF; US $ 44.1 billion in total – will enter a new dynamic from the assumption of the next government.

Georgieva, a personality who has a career in multilateral organizations, is aware that the situation is generally difficult with those who, from the Monetary Fund, are confronted with processes preceded by resounding failures. The last was Dominique Strauss-Kahn, doubly punished: for the crisis in Greece which he attended with a unique adjustment in 2010; and because then, Strauss-Kahn was postponed because of charges against him for integrating a prostitution ring.

And, as the new IMF director analyzes the case before explicitly issuing his opinion, indirect signals are already beginning to be detected in the sense that the agency is planning a more difficult phase in its relations with the IMF. 39; Argentina.

In Buenos Aires, Jamaican Trevor Alleyne manages the office that the Fund opened late last year. The economist, who has been working for almost two and a half decades on the board of the agency, leaves no doubt: "If the next government wants a refinancing of deadlines, it will have to launch a reform program at a pace accelerated, "he said. Check it out.

Trevor Alleyne is just reproducing the line that "lowers" his new boss directly. "This suggests that Argentina could reschedule its debt in the long run, but yes, the country should push the reforms forward immediately," he said.

After the STEP, Trevor's agenda intensified. The Jamaican is a man of permanent consultation of economists and investors. They want to know for themselves the next steps of the IMF, now that Alberto Fernandez was very close to Casa Rosada.

In order for your interlocutors to understand at what stage the "new command" of the Fund is, the Jamaican mentions the term "front loading". It is an expression widely used in the world of finance to indicate that payments or charges must be made in advance or at the beginning of a loan, for example. According to the Fund's vision, Argentina is in this situation.

"They do not hold the signals or the promises, and because the country needs money on the table, they have to prepare a program with reforms to be implemented on an accelerated basis," Trevor explains in his contacts with his colleagues. colleagues. and even in meetings with investors.

Trevor, in this regard, asserts that the Washington agenda has three basic requirements, which Argentina should adhere to if it calls for a rescheduling of colossal credit maturities:

1. Change from a red public accounts to a primary surplus as early as the year 2020.

2. Congressional approval of a pension reform that eases the country's tax burden.

3. A law on labor reform.

The agenda of Alberto, on the contrary

This taught Washington agenda runs up against plans by Alberto Fernández. Not just because of what the candidate promised during the election campaign. Otherwise, they are also rejected by some of the economists who are part of their team and who have a direct link with international investors.

In recent weeks, Guillermo Nielsen and Emmanuel Álvarez Agis have ruled out the possibility of a pension reform, whenever they have contacted groups of investors eager to know the projects of "Los Fernández".

Alberto F. himself was in favor of "studying" an increase in the retirement age for future retirees, without however removing the rights of people who already collect their assets.

With regard to labor reform, some of its advisers recommended the flexibility put into practice at Vaca Muerta, which has led to job creation. These same advisers told him that today in Argentina a generalized labor reform was not politically viable, but that one could at most analyze the changes sector by sector.

At the recent meeting between Alberto F. and the dome of the Industrial Union, the candidate avoided any mention of future flexibility. There were also no promises involving tax costs. On the contrary: "I have promised – to the businessmen – to make a lot of efforts to move the country forward, defend the industry and stop mistreating it as it does. was those years, "said Fernandez at the conclusion of the meeting with the businessmen.

Let's go back to Trevor Alleyne: Asked about the projections he is currently evaluating in Washington on the program of Argentina, beyond the concept, he answers: "We are not able to do the numbers. is complete, complete, sustainable plan ".

The Jamaican does not usually talk about politics. He does not even repeat a relevant summary of the Fund's performance in the current crisis in Argentina.

It is clear that there are conflicting months in the event that Alberto F., finally, would be devoted to the head of the state.

The candidate has already said it in a taxative way. "Those who generated this crisis, the government and the IMF, have the responsibility to put an end to the social catastrophe that is now going through a growing part of the Argentine society and to reverse it," the report said. last meeting with representatives of the Fund in mid-August.

"It may be that we have been very ambitious in the expectation of the fall in inflation," believes Trevor as the only self-criticism, in the image of what his ex-professor Christine Lagarde had repeated once.

The speculation they make in Washington refers to the fact that Argentina will sooner or later try to reach an agreement with the IMF, which would remedy a "reperfilation" of debt with private creditors.

"The country needs the seal of the IMF to renegotiate with the bond creditors," Trevor analyzes in his dialogue with the economists. In general, said the man of the Fund, these investors also believe that Argentina will have to partner with the Fund to deal with a friendly restructuring.

Try to soften a difficult directory

From the Fernández team, they do not follow the same logic. Some, like Guillermo Nielsen, often suggest that it will be necessary to stand tall during discussions with the IMF.

The economist mentions, during his talks with foreign investors, that the next government should open dialogue with the Trump administration and with the German government simultaneously.

That this strategy serves to "soften" the iron position of the "board" of the Fund, which was hit hard after the failure of the plan followed in Argentina.

In this directory, there is today a serious conflict between the directors who have ties to the US Treasury, who have followed without hesitation the demands of Donald Trump to allow extraordinary funds for the benefit of the United States. 39; Argentina. This has resulted in a debt that already climbs to $ 44.5 billion and could reach $ 53 billion if the IMF approves current disbursements.

For some observers, this internal fight would be detrimental to Argentina. This would be the genesis of the statement heard in Buenos Aires by Trevor: no rescheduling agreement would be possible unless the next government accelerates the reforms and the primary surplus.

For this reason, and as published a few weeks ago ProfessionalAlberto F. thinks alternatives. More specifically, he analyzes to put the relationship with the Monetary Fund "in pause mode".

In the event that this disbursement of the Fund does not take place in the coming weeks, Alberto F. is considering the possibility of suspending the demand for these US $ 5.4 billion (and the approximate amount of one billion US dollars which should "lower" December) and, from there, relaunch the relationship with this organ.

The idea is to limit the payments of Argentina to interest only debt contracted, but without opening argument for a new agreement to defer capital transfers of these liabilities.

Next year, for example, about $ 1.5 billion should be paid for interest only. There is no maturity of capital.

Everything is in sight: when there are still three weeks left for the presidential election, the pulse with the Fund is already contested on the "unofficial" field.

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