What will the IMF do? | Another huge technical failure …

he International Monetary Fund, with the dominating weight of the United States, was the financier of Mauricio Macri's reelection campaign. We know that their macroeconomic projections are generally unsuccessful. The novelty in this case is that it has shown that he's wrong in the electoral bets that he's doing. After this double failure, the question is what will be the behavior of the IMF, given that by political decision has concentrated nearly 60% of its loan portfolio in a single debtor, which is on the verge of insolvency. Will it release the $ 5,400 million disbursement while the Technical Confirmation Agreement is a dead letter, or will it deliver these notes to prevent the collapse of a government? who has provided unprecedented financial badistance in its history?

A first approximation of the resolution of this dilemma will take place at the meeting of next Tuesday (3 September) of the World Bank Directory which will badyze, among others, the situation of Argentina. The cousin brother of the International Monetary Fund approved last month a loan under the program called Ready for development policy 500 million dollars. It is necessary to define technical details to effect this disbursement, but the abrupt change in the political scenario incorporates a factor of uncertainty as to what the World Bank will decide now.

Contrary to the World Bank's historic loans for specific schemes (social security, labor security, work), it offers very flexible conditions for its use, with general and long-term objectives. The relevant question that will be considered by the World Bank's Board of Directors next week, where, as in the IMF, the United States has a decisive influence, is in: whether this credit advances or not with its subsequent disbursement. What is decided will be a message on the position that the United States will adopt vis-à-vis the government of Mauricio Macri.

In case the situation of financial exchanges does not become more vulnerable during these weeks, the World Bank decision could be an indicator of the IMF's potential behavior.

The IMF being dominated by the interests of the United States, its number two is the strong position of the institution, today Democrat David Lipton, who holds the position of Acting Director General until the disembarkation of Kirstalina Georgieva Bulgarian (supported by France but not by Germany who had another candidate). Under pressure from the United States, the Fund came to the rescue of the Macri government. At present, European directors do not want to be driven by this decision and are demanding a technical safeguard (the compliance report with the stand-by objectives) to approve the next disbursement.

Once again, the IMF is responsible for the debacle of the Argentine economy. In a column published on the ZeroHedge portal, it is mentioned that last Friday, CNBC reporter Steve Liesman, interviewed the new chief economist of the IMF, the Indo-American Gita Kopinath, and asked him what was the plan of the Fund for Argentina, given the vulnerability of its debt today, reflected in the collapse of bond parities. Kopinath did not answer and this escape is because The Fund still does not know what to do with the fiasco to have financed the sinking of the macro-economy.

The delegation that is in Buenos Aires, directed by Alejandro Werner, Director of the Department of the Western Hemisphere, badisted by the Head of Mission for Argentina, Roberto Cardarelli, has an exclusive political objective: get the most voted opposition commitment in the PAS the commitment of continuity of the connection with the IMF, with the conditions and economic orientation defined with the Macri government. In this way, they seek to preserve themselves from the humiliation of having bet on Macri, which was 15 points below the most voted formula.

Werner and Cardarelli will not be responsible for examining the evolution of key macroeconomic variables, task for which there will be a next landing of technicians. This mission is an advanced IMF policy to implement a bear hug Alberto Fernández, who, according to them, will be the next president of Argentina. Fernández has already provided his answer: he does not co-govern and will seek to redefine the agreement.

The Monetary Fund is in a hurry. Fernandez should not. The IMF needs a signal of continuity because it has big problems. It failed in the estimated outlook for the macro economy; has issued the largest loan in its history to a single country; He was in a fragile financial situation by concentrating on a single debtor a large part of the loan portfolio; and supported Macri's election campaign, which gave him a resounding failure in the STEP elections polls. After such a technical and political disaster, Macri's room for maneuver is reduced as it becomes an obstacle. self-inflicted damage.

Dollars will not come on September 15th, as contained in the text of the confirmation agreement. We must first work on the technical mission to badyze the progress of the economic variables, then develop the staff reportand then deliver this document to the IMF Board, which must make the political decision to approve the disbursement. This bureaucratic process in an international organization will mean that, if the answer is yes, the 5400 million dollars will enter the central bank two weeks before the October elections. Meanwhile, the stock of reserves will continue to bleed, which will make the weather more and more dramatic until the eventual turn of these dollars.