Kristalina Georgieva reiterated her support for Argentina before the bondholders and sent a signal for an agreement with the IMF

Paula Lugones

06/14/2020 - 23:30

• Clarín.com
• Economy

When Argentina is in the full process of negotiating the debt with the bondholders, the executive director of the International Monetary Fund, Kristalina Georgieva , wished that the country did not fall into default and said that, if the Government goes to the agency to request a program For aid, "we will work hard" to support policies that break the "boom and bust cycle" that the country has suffered for decades.

In an interview with the newspaper El País of Spain, the head of the Fund was asked about the support the agency has been giving to Argentina and how she imagined the country emerging from the crisis. Georgieva said that “Argentina's is a complex story. A country that has gone through boom and bust cycles for decades, that has suspended payments eight times and is now in its ninth technical default , hopefully it does not become real. And it has had troubled relations with the IMF for a long time. "

And he added: “What we see now is an opportunity for the country to break this cycle and that opportunity must be anchored in something, which is to return the debt to a sustainable level. In other words, to achieve a positive result in negotiations with creditors in order to open a space. It seems remarkable to me how Argentine society has joined in the negotiations. Of course, as in all countries, there are differences, but it is a country with great economic potential. ”

Georgieva's words come at a time when the government is renegotiating with private creditors , with parameters that the agency has set for debt sustainability. The Fund has supported the official offer but has also left some room for negotiation.

In the interview, the Bulgarian official again supported the management of Alberto Fernández. "Regarding the president, with whom I have been interacting on economic matters, I will tell him that he wants to do the right thing for the Argentine people and also for the role that the country can play in the region and in the world. So I wish them all the best of luck and if they come to the Fund to ask for an aid program, we will work hard to support the policies that break this cycle of boom and bust. ”

After restructuring the debt with the bondholders, Argentina must renegotiate the loan of 57,000 million dollars (of which some 44,000 million were granted) and that was frozen last year after the PASO. That will be a process that will come later since there are no strong maturities with the body this year. In this sense, Georgieva opened the doors to dialogue , although this process has not yet been formally started, which could lead to a reformulation of the previous StandBy program or the granting of a new loan with longer terms, or Extended Facilities.

Regarding the unprecedented crisis that the Fund has had to face with the coronavirus pandemic, Georgieva said: “I was a European Commissioner for humanitarian aid, I come from a country that suffered a very severe crisis in the 1990s and I worked on cases at the World Bank and very dramatic situations. I have prepared for this moment throughout my life. ” “We live in a world more prone to shocks. Now we have the pandemic, but the climate crisis has not gone anywhere. We experience climatic shocks and, being so interconnected, we inevitably have to overcome economic obstacles. We have to move towards a more resilient society and economy, "he added.

Regarding whether a rapid recovery from this crisis is possible, Georgieva noted: “We have never done anything like this before. Furthermore, the degree of uncertainty is very high because we do not know how the pandemic will be overcome, nor if there will be a new wave. We are optimistic about vaccines and treatments, but we don't have them yet. I think the crisis will be very deep , but relatively short-term, and the recovery will start gradually this year. Our latest forecast for 2021 is global growth of 5.8% , although later this month we will update our forecasts. The review for 2020 will be downward for most countries, with some exceptions. ”