Ezequiel Burgo
09/16/2021 7:25 AM
Clarín.com
Economy
Updated 09/16/2021 7:30 AM
Last night the Government sent a draft Budget 2020 that provides for an agreement signed with the International Monetary Fund to refinance the debt of US $ 47,000 million.
This represents an important piece of information because it indicates that the
main working hypothesis of the Executive Branch is an understanding with the body and not to break that relationship.
Nor is it less than that the President said yesterday that
a program with the agency would help the country to obtain credit for its recovery
(“If that agreement did not exist, the conditions would be different; it would be different in the possibilities that the State has in promoting development than we want to promote and would be affected public works, education, health, business credit ") (see above).
However, none of this should be read as facts that represent that the negotiation with the IMF is on ,
much less about its resolution. in any case they are cairns that ratify the agenda of Martin Guzman, his desires.
In the Government they are excited that in October the Executive Board will give the green light to an announcement about the surcharge
. But the truth is that lowering the rates on those loans has nothing to do with agreeing to an
Extended Facilities
loan
like the one the country wants. Argentina aspires to ask for money to pay the debt and then return that amount
within ten years in exchange for making some reforms in its economy.
For example, the commitment to meet fiscal goals and not introduce new expenses or taxes in the period of the program. Quite a challenge for a country that doubled the weight of its public spending in the economy in ten years, unique in the world.
Argentina by signing such an agreement, will have made a commitment.
For this, the IMF must ensure that the Government has political support and that the opposition will help
. Otherwise he will
not approve it because he will not risk,
once again, with Argentina. But do these political conditions exist today in the country, which the IMF will evaluate, when it is clear that not even the Government gathers support within its administration?
How does Martín Guzmán, the only valid interlocutor that the IMF recognizes in a member country, remain
in the conversations with the organization?
How to explain what happened yesterday and give guarantees
to sign a program without changes in the middle from one moment to the next, in a country that does not provide a minimum of predictability?
Uncertainty is the enemy of capitalism, said Joseph Schumpeter, and therefore there is nothing worse for markets than a lack of predictability.
The IMF is an institution thought and designed to precisely 'patch up' those market failures and lend money that when private investors do not.
But the IMF does ask governments and opposition parties to provide certainty about their programs.
Argentina would not be achieving it.
Look also
The Government expects an inflation of 33% and a fiscal deficit of 3.3% of GDP in 2022
From the political crisis to the institutional crisis?
