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Guzmán encapsulates himself with debt and steps down from the fight over rates


After the European tour, he faces an agreement with the IMF at greater speed and the new payment terms with the Paris Club. Look to get away from fees.

Juan Manuel Barca

05/16/2021 22:06

  • Clarí

  • Economy

Updated 05/16/2021 10:06 PM

Martín Guzmán returned "renewed"

from the European tour, as they say in his surroundings and will seek to take advantage of it to accelerate the negotiations with the IMF.

For these hours, the Minister of Economy is focused on leaving behind the inmates that made him see the abyss and will advance

as soon as possible in a new scheme with the Fund for the next 10 years.

In the Casa Rosada they believe that the moment is optimal after the breath of air that the trip meant.

The first "achievement"

, they say, was to have achieved

that the Paris Club does not declare the default

. Argentina must pay US $ 2.4 billion before May 31 with a grace period until July 31, but there are still "technical" issues to be resolved.

Although the IMF agreed to evaluate the claim for the US $ 900 million that the surcharges represent and European leaders gave signs of support, Guzmán's agenda remains fraught with challenges.

His objective now is to initiate consultations on Article IV

as a preliminary step to closing a new program with the agency and renegotiating the US $ 44,500 million debt.

This past week we had a valuable tour led by our President @alferdez, who helps us to continue building the support and international consensus necessary to solve the debt problems that our Argentina was led to.

- Martín Guzmán (@Martin_M_Guzman) May 17, 2021

The mechanism allows the agency to

supervise exchange, monetary, fiscal and financial variables


The economy minister had promised to move down that lane in February 2020 in a meeting with the head of the IMF, Kristalina Georgieva.

But the outbreak of the pandemic and the discussion with private bondholders buried the negotiations.

That concession is not without new tensions.

Furthermore, the Government assumes that the ruling party itself could

boycott the initiative


Fernández and Guzmán experienced it firsthand when, during the tour, statements and projects promoted by Kichnerism were known to limit the negotiation with the Fund and the rate increase already agreed upon.


Guzmán is going to defend his plan to the letter


"He came back strengthened," they say in La Rosada.

Otherwise, the risk is that the Paris Club will

not agree to extend the deadlines.

This formula, according to official sources, will make it easier to advance in a facility agreement extended for 10 years and resume

payments only in the second half of 2025


That is the expectation.

If this roadmap is agreed, the Fernández administration will postpone the nearly

US $ 7 billion

in maturities this year to the agencies and the remainder throughout his term. The scenario, on the other hand, will be complicated 

from 2025

, since

US $ 9,000 million per year will have

to be


to the Fund

and US $ 8,000 million

per year to private bondholders, including interest.

Within this package, it

will be key to define the disbursements

 that Argentina will have to make

once the payment schedule is resumed

. Until such time and as far as possible, the BCRA will continue to accumulate reserves and the Treasury will finance itself in the local market. With the foreign exchange for soybeans, and the dollar and spending trampled, there would be room to achieve a fiscal deficit of 4.2%.

Another item negotiated by the Executive is the

inclusion of a review clause

, whereby in the event of any change in the Fund's statute or in the terms of the agreement during the term thereof, the negotiation is reopened.

To do this, Guzmán will seek to reach political agreements after his failed attempt to fire Undersecretary of Energy, Federico Basualdo.

In La Rosada they know that it is an electoral year and they understand that

the attacks against the minister were only "corrective



Your mission will be to surf the internal.

Precisely, Kirchnerism requires an agreement with the Fund for more than 10 years and with a rate cut.

The other inescapable battle is inflation, a variable that hits income and heats up the fight for votes. 

Look also

Elections increase doubts and internal government

Source: clarin

All business articles on 2021-05-18

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