2023-07-20 05:18:00
the minister Sergio Massa held a meeting out of schedule, almost an hour, with the managing director of the International Monetary Fund, Kristalina Georgievawhere he advanced in the details for the remodeling of the foreign debt repayment agreement that Argentina maintains with the multilateral credit organization. The meeting is considered the prelude to a package of measuressome of which would be announced next Friday.
as far as he might tell PROFILEexclusively off the record, Massa’s meeting with Georgieva was held in “strict secrecy”. It happens that the intervention of the highest referents of the negotiation occurred in parallel with the talks held in Washington by the entourage which has been in the US capital since last Monday, headed by the vice minister, Gabriel Rubinsteinand the second vice president of the Central Bank, Lysander Cleri. While the officials and the staff refine the technical details, the Argentine minister and the head of the IMF reached a summary of the political will to conclude the agreement.
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The virtual conclave took place between 8:30 p.m. and 9:30 p.m., Argentine time. Massa was accompanied by the head of advisers of the Ministry of Economy, Leonardo Madcurand by the Secretary of the Treasury, Raul Rigowho left quickly for Ezeiza to board the flight of the North American company American Airlines, which had a departure time of 10:30 p.m. The participation of both officials is essentialbecause they carry with them details of the agreement of the points that still remained to be agreed.
Agreement and measures to sustain the economy
as anticipated PROFILE, Madcur – Massa’s right hand in terms of political definition – and Rigo joined the trip as a sign of support for the negotiations, which had been born with uncertainties at the beginning of the week. Today, “In Economy they affirm that everything is on track for closure and that, even on Friday, they might take measures that are part of the agreement package”confirmed reliable sources from the Palacio de Hacienda.
The outcome of the day, with the secret meeting with Georgieva, had two key backgrounds: Own Massabetween electoral act and management measures, managed to have telephone and virtual meetings with White House officials and with the German economic team. Both countries are key to definition in favor of Argentina at the table of the board of the IMF. The third weight chairwhich had already pledged its support, she’s Chinese. With these endorsements, the meeting with the head of the Fund gained more speed.
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The understandings with the United States and Germany were born from two protocol meetings, where both countries opened the door. Last Tuesday morning, Massa spoke, via zoom, with the State Secretary of the Federal Chancellery Germany, Jörg Kukies; and, more at noon, the talk was with the international economic adviser to the US National Security Council, Myke Pyle. There the support to close the new agreement with the IMF finished germinating.
IMF claims: devaluation and end of stocks
The day had started in a complex way for the negotiation. In the last hours of American Tuesday, the IMF published a forceful report on Argentina’s needs to straighten out the uncertain economy. There she claimed a devaluationto eliminate the different exchange rates, and apply a fiscal and exchange adjustment. “Possible policy responses are growth-friendly fiscal consolidation, combined with restrictive monetary policy and a simplified exchange rate regime, remains essential to moderate domestic demand growth, strengthen the trade balance, reconstitute international reserves, recover access to markets and guarantee the sustainability of fiscal and external debt”, the report stated. External Sector Report (ESR), called “External Rebalancing in Turbulent Times” (“External Rebalancing in Turbulent Times”).
However, those measures are outside the current discussion. The demand for measures that balance the macroeconomic context are part of the recipes that The Fund wants to include in the reform agenda that the next government has to put into practice since its arrival on December 10 next. At least Massa made it clear that It will not be an inflationary devaluation, nor an adjustment of expenses, that will set in motion in the short or medium termwith an election in between that has him as a presidential candidate in the ruling party.
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as far as he might tell PROFILE, Massa will deepen his active participation in campaign days, no longer able to involve management acts in the call to the polls. But a reshuffled agreement, will prevail as positive news, both in the population, which feared negative effects on the economy in the face of a worsening of financial conditions; as, also, in the markets, which had reacted with exchange rate stresswhich raised the dollar blue to a new record. The measures this Friday will seek to clear up uncertaintiesmaintained sources of the economic team.
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