Paris Club: Argentina asks Kristalina Georgieva for a maneuver like the one it did with the bondholders

Ezequiel Burgo

06/12/2021 8:59 PM

• Clarín.com

• Economy

Updated 06/12/2021 8:59 PM

Argentina negotiates with the

Paris Club

the payment of US $ 2.4 billion.

Its term expired on May 30 and now runs a period until July 31.

If you do not pay, you will

default

(although not on that day exactly).

The Paris Club countries explained to the President that they are willing to give more time.

As long as you sign a program with the IMF and an article IV.

It is a formality of the Ministries of Economy of each economy that is part of the Paris Club to justify that a debtor is unable to repay the loan.

Argentina will not be able to close an agreement with the IMF between now and July 31.

Minister Martín Guzmán asked in October last year to initiate talks to sign an Extended Facilities program.

But since then the negotiations have not progressed.

Such an agreement will require the calibration of a fiscal, monetary and exchange program that involves definitions of

structural reforms

that Kirchnerism did not show it was willing to endorse.

If it is not an IMF agreement, what can Guzmán bring to Paris on July 31 and prevent the countries from meeting and declaring default?

According to government sources familiar with the negotiations, the option would be a letter that speaks of an "understanding" or "approval" of Argentina's goodwill to finally sit down with the IMF.

Is it possible to achieve something like this?

In the market there are doubts about it.

Who in the organization would sign or put their name guaranteeing before the Paris Club that Argentina is going to sit down to negotiate a program with the organization in good faith?

The background: debt is not sustainable

A document of that caliber would not pass through the Executive Board admitted in the Government itself.

They recall that the only case like this was when in February of last year the IMF staff came to Buenos Aires and signed a report stating that

Argentina's debt was not sustainable

, supporting the strategy of the Minister of Economy, Martín Guzmán, of restructure payments to private bondholders.

That IMF document did not go through the Board.

It was an exception because generally when the body pronounces like this, the exam is approved by the Board of Directors.

The Government saw this as a triumph over the bondholders that began to twist the negotiation in their favor.

And a gesture from Georgieva of goodwill.

Official sources now expect something similar with the Paris Club.

May the IMF grant Argentina its approval and may it be a kind of guarantee that it will sit down to negotiate an agreement.

The China theme

The negotiation with the Paris Club involves other open questions today as well.

According to parties participating in the negotiation, members of the Paris Club have asked Argentina to know if while requesting more time to pay its debt, it will cancel obligations with other countries such as

China

.

The Treasury is paying Beijing debts and that prompted the claim of countries that were requested a restructuring in the case of Japan, Germany.

The United States is also following the China issue closely.

And the World Bank, which lends lines of credit for infrastructure and sees China as a competitor.