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Why Alberto Fernández's attack on the debt adds more uncertainty to Martín Guzmán's negotiations at the IMF

2021-03-02T10:28:32.450Z

While the Central Bank echoed the President's complaint, the Ministry of Economy remained silent and is preparing a trip to Washington.



Ezequiel Burgo

03/02/2021 5:01 AM

  • Clarín.com

  • Economy

Updated 03/02/2021 6:58 AM

The

Central Bank

said yesterday that the Government of Mauricio Macri failed to fulfill its duties by signing an agreement with the IMF for US $ 54,000 million.

He assured that he did not have the powers to do so, that he failed to comply with administrative procedures and asked to investigate whether there was damage to the State with the US $ 44,000 million of the total that arrived in the country.

President Alberto Fernández lashed out with everything.

"I have instructed the pertinent authorities to formally initiate a criminal complaint aimed at determining who have been the authors and participants in the greatest fraudulent administration and the greatest embezzlement of funds that our memory registers

.

"

What

consequences

can it have on the ongoing negotiations?

At the

technical

level

of the body, not much.

The discussions between the economists of Economy, the Central Bank and the IMF will continue.

In the coming weeks, Minister Martín Guzmán will travel to Washington to advance the talks on an Extended Facilities program to refinance the debt.

However, the Central's statement and the President's speech will add

uncertainty

at the

political

level

.

Even if the

Ministry of Economy

did not echo the verbal-judicial attack.

It is that the representatives of

Joe Biden, Angela Merkel and Emmanuel Macron

sit on the Board of the Fund

.

Doubts about Argentina's real commitment to pay the IMF -that is, to those countries- will grow after the Kirchner attack to question the legality of the fine print of the agreement signed in 2018. It is no longer a question of an agreement after the elections.

Guzmán would soon meet

Kristalina Georgieva

in Washington.

He aspires to do the same with

Janet Yellen

, the Secretary of the Treasury.

With what legitimacy does the minister have to propose a five-year horizon of his

multi-year

goals

in economic matters? 

At the local level, while

Kirchner

deputies

will say that administrative procedures were breached when signing that time (presenting opinions), in the macrismo they assure that no rule was breached.

The agreement was made based on

article 60 of the financial administration law,

which enables to take on debt with international financial organizations

without the need to go through Congress

.

In fact, the current government itself sent a bill that became law in which a new condition is established so that agreements with the IMF now have an express authorization from Congress.

In his recitals, he highlighted that the agreement that Macri signed in 2018

“since it is a loan signed with a multilateral organization of which the Argentine Republic is a member, did not require its approval by the Honorable Congress of the Nation by virtue of the provisions of article 60, in fine, of Law 24,156 of Financial Administration ”

.

Finally, was there

fraudulent action

against the State?

The state debt did not increase as a result of the loan with the IMF.

In March 2018 the total stock was US $ 328,000 million and in September 2019, after PASO, US $ 311,000 million

.

“He did not run away.

It did not increase.

It was used to cancel previous debts, ”

tweeted former minister

Hernán Lacunza

.

The financial conditions of the loan with the IMF are always more advantageous since they imply lower interest rates.

In fact today Guzmán

pays rates of 3% to the IMF and 20% to the market

.

The IMF does not lend money for countries to sink those dollars into stocks (hospitals, roads, factories).

The two negotiators who sent the

United States and Great Britain to the Bretton Woods meeting in 1944

(Harry White and John M. Keynes) thought of a global system to 'stabilize' flows in the economy as if it were a MW regulator: before a Sudden crisis in the tension that put at risk the potential product -a refrigerator or any appliance-, the IMF would lend money as a help wheel until the supply is restored.

Look also

Opening of Sessions: attack on the debt, salary promise, kick the payment to the IMF and silence on the dollar

The Central Bank initiated an investigation of the officials who participated in the agreement with the IMF

Source: clarin

All business articles on 2021-03-02

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