“When the market fails, the state must intervene to bring down inflation”

– How did you experience these European negotiations for Italy, Germany, France and Spain?

-We have two negotiations in parallel. On the one hand, with the International Monetary Fund in order to obtain a program that will allow us to refinance the loan of 45 billion dollars. On the other side, the Paris Club. In this context, it is necessary to reach multiple levels of consensus, one of them at the international level, for example the international support of the shareholders of the International Monetary Fund, on the program that Argentina is putting on the table. . For this reason, dialogue with those who most influence the decisions of the IMF’s executive board is essential in this process. We have built more understandings and more supports. The position of Germany, Italy, Spain and France has been very constructive. And it also allowed us to make progress in the construction conditions to be able to order the issuance of the Paris Club debt.

– There can be no renegotiation with the Paris Club if there is no prior agreement with the IMF. How are you going to solve this problem, before Argentina fails with the Paris Club, which would be in July?

What we are proposing is that the most important thing is that the agreement with the IMF works well before it is swift. Of course, if it is reached earlier, it will allow the financial horizon to be cleared earlier. Work is underway to build these consensuses. But it may take longer and if it does it would put us in need of being able to agree something before with the Paris Club and build a bridge over time until it is signed with the IMF.

– So there is an agreement for a kind of bridge if we are not found with the IMF

They work on this line.

– Do you think you have the possibility of concluding with the IMF before the elections or will it be after, as they believe in Washington?

If the deal could be done in May, that would of course be a valuable outcome. If it is not reached in May, what happens then is that there are midterm elections. Given the magnitude of the debate that is going to take place, it would not make the most sense for this debate to take place in the middle of an electoral process. Because all the emphasis will have to be placed on a set of questions, which will have consequences that transcend a period of government. So what we’re seeing is that either a deal is done in May or early June, or it won’t have to be after the election. What we have raised from the government is a commitment to open a broad debate in front of society and to involve the entire political front. Because what we are looking for is that the stabilization policy is not only a government policy but also a state policy. As we did with debt restructuring with private creditors.

– The IMF will ask for structural reforms and also the famous article IV that Cristina Kirchner does not accept. How will you resolve this conflict?

The work with the IMF has been constructive. Mutual understandings about what Argentina needs have continuously faded. On what we are proposing as pillars to stabilize the economy and put it on the path to sustained growth. During the visit to Washington DC just over two weeks ago, at its conclusion, the staff issued a statement, listing the macroeconomic principles on which there is already agreement, which should form the basis of a program. This declaration demonstrates support for the economic vision proposed by the government. A break with the vision that dominated the foundations of what was the stand-by program for the year 2018. And in this sense, it is implicitly mentioned a set of structural problems, which are far from being what the reforms structural structures of IMF programs. When we talk about structural problems today, we are talking about what affects the organization of the economy and which then has an influence on consumption decisions, on savings decisions, on investment decisions. And the most important in this sense are: first, deepening the development of financial markets.

– The IMF says it is difficult to negotiate with Argentina because there are interns in the government. As if you don’t have the power for the government to accept what you are proposing. How do you respond to that?

The IMF does not say that, one person said it and it is not part of the negotiating team. In addition, it has been clarified that this person is outside of what this process is. The government has a unified position in this regard, which is the position of seeking to reassure the economy, to continue on the path of rebuilding the foundations that we need as a country to have an economy that generates work, adds of value, generates currency. that give the opportunity to grow stably. And that this be done throughout the national territory, with a federal logic and it is we who do it. In other words, respect our sovereignty. In that sense, we are all on the same line.

– Why did you decide to go to Moscow in the midst of this crisis between Russia and the United States?

It was a trip that we had already considered taking, if the encounters we were aiming for were confirmed. It is very valuable to us for many reasons from an economic point of view. In the first place, due to the fact that Russia has an important role in the international economic architecture, when determining the conditions which will involve how the liquidity that is created in the world is going to be distributed. The fundamental problem facing the world today is that not only should liquidity serve low-income countries, but also middle-income countries. And we seek to continue to build a line with Russia that will allow us to have a more enhanced situation for middle-income countries. We will also talk about negotiations with the International Monetary Fund.

– Is it wise at this moment to speak of a deepening of the strategic relationship with Russia, when we need the United States’ help for the Monetary Fund and when Russia has just sacked ten diplomats? spies and sanction the United States? In addition, Europe demands that Russia withdraw 40,000 troops from the border with Ukraine.

We live in a multipolar world and what Argentina is looking for is to have a healthy relationship with the United States and Russia.

– What will your role be in Moscow? Are you going to negotiate the installation of the Russian vaccine in Argentina and what will the installation of this vaccine in Argentina look like?

The lead has to do with the economic issues he pointed out, with being able to build global rules of the game so that increased liquidity around the world also benefits middle-income countries. There is also the issue of negotiations with the International Monetary Fund. Regarding vaccines, we will collaborate on an agenda driven by the Presidency of the Nation and the Ministry of Health.

– We are in the middle of the pandemic and Argentina is asking for an exception, as you say a “creative solution” for the debt. Do you think the world is fed up with Argentina’s requests for exceptions or do you think the pandemic will help negotiations?

What is the exception requested by Argentina?

– We are asking the Fund for this new renegotiation because the debt is not sustainable. At the Paris Club a little longer …

When a debt becomes unsustainable, there is a shared responsibility. On the one hand, a debtor who has borrowed and, on the other hand, a creditor who has decided to lend. This shared responsibility also means that all parties must sit at the table on the principle of good faith to resolve a problem, which has implications for all parties. And that’s what’s happening with the International Monetary Fund. It’s the same with the Paris Club.

– How’s inflation going? It was stronger than you might imagine in March.

What we saw in the first quarter was a difference between actual and projected inflation of about two percentage points, which is partly explained by the international price situation and partly also because that there have been expectations of rising inflation. And this is something that we are correcting and the action of the state is fundamental. The starting point is to find coordination that takes place in a more flexible way, which essentially puts unions on one side of the table and companies on the other. The government has put on the table a macroeconomic program. The unions reacted responsibly, aligned with macroeconomic objectives, by closing the parities in accordance with the finance law. On the other hand, there is work to be done. What we do not see today in Argentina is a capacity for coordination between companies and leadership within companies, which is consistent with the capacity for coordination and leadership that we see on the side of the representatives of the companies. workers. Is this the reason for the increased controls? – -There are controls that we have tightened, as we announced last week. To the extent that coordination does not occur in a way without the need for the state to intervene, then the state will intervene. This is something that other countries that have been successful in lowering inflation from high levels, such as Mexico, which was able to lower it from triple digits to single digits between 7 and 8 years, have achieved. The state must play a role in aligning behavior with what is macroeconomically feasible in an economy that has yet to resolve its coordination problems. We are carrying out these actions to correct the gaps that have occurred between what was planned and what was done; and be able to meet the macroeconomic objectives of the budget.