Ezequiel Burgo
11/07/2020 21:02
Clarín.com
Economy
Updated 11/07/2020 21:02
This
Tuesday
the mission of the International Monetary Fund arrives in Buenos Aires to agree on the fine print of the agreement between the organization and Argentina.
Its staff and economic team will review a
path of fiscal adjustment for the next few years that Martín Guzmán
, Minister of Economy, will put on the table.
The official announced in the week that he is working on a
"multi-year macroeconomic stabilization program"
that will explain how the monetary, exchange and fiscal variables will be ordered.
The Fund and the minister will evaluate scenarios and speeds to unfreeze
rates
(lower subsidies), raise
taxes
(lower deficits) and step on
pensions
(liquefy spending).
In exchange for this effort, the country will ask the agency for money to pay the
US $ 44,000 million debt
contracted with Mauricio Macri's stand-by and that Argentina must begin to pay off in 2021. The IMF does not refinance debts, it only lends money.
The Government would also seek
extra funds to carry out public works
.
Julie Kozack and Luis Cubeddu, the two directors of the Fund who come to Buenos Aires, would, in principle, spend just under two weeks in Buenos Aires.
This
mission
is key because the Government intends to close the agreement as quickly as possible to consolidate a previously weak stabilization of the
dollar
and, in this way, give a signal to the
market
.
At the same time, and in parallel, it seeks to give a nod to
politics
by adding
Congress
to the discussion.
It is not ruled out that the legislative treatment of the agreement will be in January if it is not reached before the end of the year.
There is a precedent for the sanction of a key law for the economy in the summer: that of debt, in February.
Guzmán's adjustment requires avoiding another
stress-test
: the validation of
La Cámpora
(although at this time it is much more critical of the Central Bank's management than of the Economy).
It is that Guzmán threw a ball to the strap to stabilize the dollar: in the face of the panic of a 130% gap, the fiscal adjustment began in November without waiting for 2021 and anticipated the elimination of most of the expense associated with Covid-19.
"It is the only way available to reduce public spending by $ 150,000 million and meet the publicly stated objective of reaching a primary deficit of 7% of GDP, 1% less than that projected by the Economy weeks ago,"
said the Analytica report. This week.
The minister thus seeks a
three-way carom
with the IMF: send a signal to the market, support from the opposition to accompany him and consensus in the ruling party.
None of this has happened so far
.
Why should it be any different this time?
Guzmán in the week said that “we are building a stabilization bridge of around 60 to 90 days while working on a multi-year macroeconomic stabilization process where we will define how the fiscal and external accounts and the accumulation of reserves will be put in order. , at the same time that the economy recovers ”.
The same body, through spokespersons, said on Friday that the mission's work “will focus on the authorities' fiscal, monetary and structural agenda for the
medium term
with the aim of anchoring macroeconomic stability and laying the foundations for a inclusive growth ”.
The minister also announced that the primary fiscal deficit this year will be less than 7% of GDP.
For 2021 the Budget project expects 4.5%.
Members of the economic team believe that the organization is more interested in signing a compliant agreement with the support of the ruling coalition, than one with a deficit of less than 4.5% but without political backing.
"The IMF bears the cross of what happened in 2018 and the Government is trying to put together a history that it did not build after agreeing with the creditors after the debt swap,"
says
Marina Dal Poggetto
, director of Eco Go, about the rapprochement between the parties.
"The IMF thing can help send a signal
.
"
The Casa Rosada also seeks to access credit lines to finance infrastructure works.
They would be loans from the
IDB
and the
World Bank
.
They are still negotiations.
Is that to get a nod Argentina should show an
article IV
with the IMF, a kind of certificate that international organizations and export agencies request to cover themselves when it comes to lending money.
Article IV accredits that the Argentine accounts are under monitoring.
Martín Rapetti
, an economist at CEDES, believes that Guzmán's signal this week has been favorable.
“The design and announcement of a comprehensive stabilization plan will be very useful to provide the private sector with a planning horizon.
It would explain how the government foresees that the main variables will evolve: exchange rate, inflation, fiscal deficit, monetary issue and inflation and what policies are going to be implemented in consistency with that objective ”
.
On the other hand, for the former president of the Central Bank
Martín Redrado
, who publicly spoke in favor of a multi-year plan, a program that does not generate confidence will fall into the same fate as the two failed agreements of 2018.
“My approach to multi-year convergence of the variables administered by the public sector should be the basis of a comprehensive stabilization and growth plan.
The program to be negotiated only poses a fiscal, monetary and financial path.
It is insufficient to generate the change in expectations that Argentina needs ”
.