negotiations with the International Monetary Fund remain unresolved

Argentina has assured that it will honor the payment of nearly $ 1.9 billion (1.7 billion euros) due to the International Monetary Fund (IMF) on Wednesday, December 22. Already, in September, the country had paid rubies on the nail a maturity of the same order, to repay the loan of 44 billion dollars (estimated today at 45 billion dollars, due to the fluctuation of the basket of currencies), contracted by Mauricio Macri (center right, 2015-2019), in 2018.

But then ? The negotiations of this debt ” unsustainable “, according to the diagnosis of the IMF and the Argentine government, have been slipping for almost two years. The difference from when the talks started is that time has never been so pressed, with a stifling payment schedule. Indeed, most of the maturities are concentrated in 2022 and 2023, with around $ 19 billion to be repaid each year.

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The current state of reserves leaves no doubt about the need for restructuring: they amount to 6 billion dollars net (according to private firms), a meager booty that the country also needs to pay for its imports, rising with the rebound in the economy.

At the end of an Argentine mission to Washington, the IMF declared, Friday, December 10, that “Further discussions [seraient] required “. The same day, the president, Alberto Fernandez (center left), assured, in front of a crowd gathered in Buenos Aires to celebrate the thirty-eight years of the return to democracy in the country: “Argentina austerity plans [du FMI], it’s history ”, in reference to the forced budgetary discipline put in place to respond to the commitments made to the international institution in 2001, and to the bitter memory left to the population.

“Complex situation”

“If we have not concluded an agreement with the fund, it is because we are not going to kneel down”, recalled Mr. Fernandez, at the end of October. He thus reaffirms that he will not accept an agreement accompanied by the traditional IMF conditions with a view to budgetary discipline, such as a reduction in the public aid regime, an overhaul of the pension system or a more flexible labor market.

“The situation is complex, because in 2022, the country must also pay $ 1 billion to private creditors and a debt of $ 2.2 billion with the Paris Club has yet to be renegotiated”, remarks Pedro Martinez, economist at the consulting firm PxQ. In 2020, the country has already restructured its debt contracted with private creditors, amounting to more than $ 100 billion. “What is at stake with the IMF is a possible grace period until 2026”, observes Pablo Ferrari, economist at the University of Avellaneda. The country walks on a thread: “For Argentina, the right deal is one that doesn’t involve austerity measures. But, even in the event of such an agreement, if in the meantime the country fails to consolidate the investment, payments will continue to be postponed indefinitely, which generates even more instability ”, continues Pedro Martinez.

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