Juan Manuel Barca
05/26/2021 9:31 AM
Clarín.com
Economy
Updated 05/26/2021 9:34 AM
Alberto Fernández will seek this Wednesday to close his negotiations with the Paris Club to
postpone the payment of US $ 2,400 million
, whose first maturity operates this Sunday.
To do this, he will hold a virtual meeting with Angela Merkel, the Chancellor of Germany.
These are the main keys to negotiation:
1. What is the Paris Club?
Unlike the IMF, the Paris Club is not a multilateral body but was created in 1956 to deal with Argentina's debt.
It is made up of
22
creditor
countries
,
including the IMF-based G-7 powers
.
"The Paris Club
is an informal group
of official creditors whose role is to find coordinated and sustainable solutions for payment difficulties in debtor countries," says the Paris-based institution on its official website.
2. How much is each creditor owed?
According to official data,
Argentina owes US $ 800 million to Germany (34%)
, US $ 527 million to Japan (24%), US $ 252 million to Italy (10%), US $ 185 million to the Netherlands (7%) , US $ 159 million to the US (6%), US $ 137 million to Switzerland (5%), US $ 86 million to France (3%), and US $ 80 million to Spain (3%).
The list includes credits of US $ 48 million from Canada (2%), US $ 18 million from the United Kingdom (0.75%), US $ 16 million from Austria (0.68%), US $ 6 million from Sweden ( 0.25%), US $ 3 million from Belgium (0.13%), US $ 2.3 million from Finland (0.10%), US $ 1.6 million from Denmark (0.07%) and US $ 1 million from Israel (0.04%).
3. How did the debt arise?
Since 1956, Argentina has negotiated with the Paris Club eight times
59 debts for a total of US $ 11,502 million.
If the last negotiation of 2014 is added, it would be
nine agreements for just over US $ 20,000 million
.
These are
contracts with companies
, official credit agencies or with governments.
And in all cases,
the Treasury of each country responds
.
"If a Spanish company makes an investment here and takes a loan guaranteed by a Spanish agency, that private debt enters the Paris Club," explained Ricardo Carciofi, former executive director for Argentina before the IDB in Washington.
Just in 2014, Argentina agreed with the Paris Club to pay the debt that it carried from 2001. The then Minister of Economy,
Axel Kicillof,
agreed to
pay US $ 4.5 billion to avoid a program with the Fund.
The cost was
the increase in debt
from $ 5.2 billion
to $ 9.7 billion
.
4, What happens if Argentina goes into default?
Next Sunday is the deadline to cancel the $ 2.4 billion payment and then there is a 60-day grace period.
After July 31
,
Argentina will default
and
punitive interest for
US $ 2 billion will be added
.
5. Why is the meeting with Merkel key?
After getting the go-ahead from European leaders, the President is now seeking a similar gesture from Merkel.
"
It is something that could not be completed during the official visit
, it is like closing the protocol of the State mission, it has value due to the weight of Germany," Carciofi said.
In turn, the Paris Club asks for two things: "That there be an
equity in the treatment of creditors
, a reinsurance so that no one ends up privileged. Since the Club was created in 1956 it has always been a concern, in the same way what happens when a company goes bankrupt and the judge must identify creditors' privileges, "explained Carciofi.
The second requirement is a
"guarantee" of compliance
.
"As there is no judge, the guarantee is the Monetary Fund, which is the one that is going to supervise the progress of the program so that you can comply with the commitments," said the former ECLAC adviser.
NE
Look also
The IMF changes the way it evaluates countries through Article IV
In Washington they warn about the impact of the letter that tells the President how to negotiate with the IMF
