2023-07-18 22:32:04
In the midst of tough negotiations with the technical staff of the International Monetary Fund (IMF) Due to the reformulation of the agreement, the government accentuated the political contacts to try to break the resistance and obtain the necessary votes in the Board of Directors of the organization that activates the financial bailout.
Meanwhile, the The IMF confirmed the start of talks in Washington within the framework of the fifth review pending approval.
“The IMF team and an Argentine delegation face-to-face technical meetings began this followingnoon in Washington, to advance the fifth review of the program supported by the Fund. These meetings are expected to continue over the next few days. We will communicate more details in due time,” said a spokeswoman in response to a query from this outlet.
With the aim of obtaining international support, the Minister of Economy, Sergio Massa, held two crucial meetings with officials from the United States and Germany during in the morning from the morning and via zoom.
In the morning, the head of the Palacio de Hacienda spoke with Jörg Kukies, Secretary of State of the German Federal Chancellery, and at noon he had a connection with Mike Pyle, International Economic Adviser to the US National Security Council.
A Biden man with an oiled link to Massa
Pyle is one of the trusted men of US President Joe Biden and maintains a well-oiled relationship with Massa, whom he received on the last visits that the now pre-candidate for president made to Washington.
According to sources familiar with the negotiation, Although there is a favorable political climate to support Argentina, there are countries that maintain objections as is the case of Japan, which would be blocking the firm.
It should be noted that, within the framework of the renegotiation of the debt with the Paris Club, Argentina has already signed all the necessary bilateral agreements, with the exception of Japan. Keeping the program with the IMF in force is a sine qua non condition for the reformulation with the European entity to remain standing.
Massa resorted to these contacts following having rejected his participation in the summit of Finance Ministers and Central Banks of the G20 which is taking place in Gandhinagar, India.
The minister had decided last week not to be present at that meeting at a time when the discussions with the IMF had become extremely tense.
The official explanation from the Palacio de Hacienda shows that Massa did not travel for “management issues.” The decision becomes highly political when it was not decided to send a representation from the Central Bank and leave the spaces corresponding to the Argentine government empty.
With the negotiation apparently on the best track and with the decision to send a delegation to Washington given the concrete possibility of agreeing on the new agreement, Massa decided to tie up political relations to give the final impetus to the deliberations.
Acting almost in tandem, President Alberto Fernández took advantage of his presence at the Plenary Meeting of Heads of State of the EU-CELAC Summit in Brussels to reiterate his criticism of the organization.
“The International Monetary Fund has not been able to find the time and the will to review its policy of surcharges and the available capital of the development banks continues to be insufficient,” launched the president.
Another envoy to negotiate with the IMF
To reinforce the mission in the United States On Tuesday night, the Secretary of the Treasury, Raúl Rigo, travels to the US capital and will join the group made up of Vice Minister Gabriel Rubinstein, the Chief of Advisors, Leonardo Madcur, and Vice President of the Central Bank Lisandro Cleri.
Rigo’s presence is essential because he is the one in charge of the box and who will have to ensure that the fiscal goals are met, which until now have been the main factor in disagreement with the organization.
He Fiscal deviation is an obsession of the IMF since it points to it as the main cause of inflation. In addition, given the lack of financing, the government must appeal to the monetary issue to cover the gap, fueling the rise in prices.
Along these lines, a report from the PPI consulting firm indicated that as of July 13, Treasury deposits in the BCRA rose $190,736 million, from $29,501 to $220,237 million, “which would be an indication of a new Temporary Advance.”
“If this new draft is confirmed, it would be added to the $688,000 million of June 30 (to buy yuan and SDRs from the BCRA to pay the IMF) and $400,000 million on July 7 ($260,000 million to buy dollars from the BCRA to pay Globales and Bonares coupons and US$140,000 million to cover fiscal needs), totaling $1,278,000 million ($1.28 trillion) in the last two weeks,” explained the consultant.
In this way, “direct monetary assistance accumulated in 2023 would rise to $1,948,000 million ($1.95 trillion), compared to a goal of $883,000 million,” PPI specified.
“In other words, following just over half the year, the deviation from the annual goal is already 120.6%. Although Washington is working on a recalibration of the targets, such a flagrant lack should not be contributing to bringing the parties closer together,” the report concluded.
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