the minister Sergio Massa scored as a win renegotiation of the agreement with the International Monetary Fund (IMF)) with three central points: the relaxation of the reserve accumulation target; the inclusion of the pension moratorium, which had been banned from the original show; and the freedom to put new instruments on the court that allow the Government to have cash to face the electoral climate, in addition to the increased spending foreseen in the budget for the first two four-month periods. At least, tried to put a friendly face on the new claims of the credit agency.
Sources close to the head of the Palacio de Hacienda revealed to PROFILE that “hard” negotiation of more than three weeks It was closed just minutes before the end of Sunday, following the critical speeches towards the organization that were fired by two of the members of the Frente de Todos: the vice president Cristina Kirchner and the head of the Buenos Aires PJ, maximum kirchner. Massa, however, made it clear that the internal political situation was not part of the arguments that defined the course correction.
“We are renegotiating it. We shit ourselves for three weeks to review it”, stated a source very close to the minister, when asked regarding the harmony that existed between the claim of Cristina Kirchner to review the agreement with the IMF and the result obtained. In fact, in the balance that he made with his surroundings, the head of the Palacio de Hacienda considered the rescheduling successfulboth within the framework of economic conditions and in the internal political order.
“Cristina asked for it”
Although Massa avoided putting the renegotiation in the domestic political mud, in the midst of the internal ones in the ruling party, he did make clear the seizure of political power to sit at the table of the Monetary Fund, changing central points, such as the tax amnesty. “Early and decisive measures will be taken to sustainably address the fiscal costs of the unexpected approval of the pension moratorium to ensure the fiscal objectives for this year and the next ones,” the IMF statement said.
The Government agreed with the IMF on a change in reserve accumulation goals for 2023 due to the drought
It happens that the Government, already with Massa in the Ministry of Economy, advanced in the retirement moratorium law, despite the restrictions that had been established in the original debt renegotiation agreement. “Cristina asked for it”, they remembered. There the head of the Palacio de Hacienda showed a difference in management with the former minister Martin Guzman. Even, by way of criticism, he made it clear that the Refinement of reserve accumulation targets is a product of what “obviously they were wrong”according to the consulted source.
The third leg that allowed the minister to have a more relaxed start to the week was the confirmation of a “fiscal freedom” to move during the months leading up to the elections due to the structuring of the budget that the IMF itself gave the go-ahead. Until September, the central administration wallet is enabled to put it according to electoral key needs. That point was not reviewed and gave air to the Government.
The repurchase of bonds was suspended
It wasn’t all good news. In Economics they gave for suspended the process of repurchasing bonds in dollars that Massa himself had announced in mid-January, with the aim of calming the markets. The Fund made the reserve accumulation goal more flexible, but, at the same time, put a clamp on the use of dollars that are in the Central Bank, so that it will not be able to return to having in its hands the debt issued by the State and that is in the hands of private parties. The goal was to get to $1 billion and so far it had managed to get halfway there, at regarding $500 million.
On Tuesday, INDEC will release how much prices rose during February
“It was not cancelled. What we cannot do is use the dollars from the reserves. But We are studying new tools to reactivate it”, admitted the source consulted by this means. One of the options is the REPO with the banks, although sovereign bonds are not at their best moment to support the operation. Which yes you can implement to add reservesdespite the IMF’s original displeasure with the increase in the monetary issue, is to implement a new dollar-soybeans or a similar instrument.
Massa took the praise from the Fund for the debt exchange process of the bonds in pesos which started last week. The implementation of this modality, which allowed it to kick the maturities that had accumulated before the primary elections to one and two years, was prohibited by the original agreement with the IMF. “Domestic financing limitations have disappeared”they were excited on the fifth floor of the Palacio de Hacienda.
Inflation goes up, does the interest rate go up?
Although the staff of the multilateral credit organization called for “maintaining positive official interest rates in real terms”, Massa does not have in mind to coordinate with the BCRA an increase in the ratebut rather maintains his dream of lowering inflation and gradually reducing the cost of local financing, key to sustaining productive activity.
Another sensitive point highlighted by the IMF was the need to “strengthen the progressivity of energy subsidies.” The original idea was for the Ministry of Energy to speed up the process of removing subsidies, but Massa made it clear that will extend until mid-April the possibility of joining the Registry of Access to Energy Subsidies (RASE)because he considers that “there are still many people who did not sign up and who are in conditions of economic vulnerability.” “We are going to multiply the diffusion”assured the official consulted.
With all these conditions, but also with the points in favor that it achieved in the review, Massa will seek to contain the claims arising from the heart of the ruling coalition. Skilled in the game of politics, and despite the fact that he swears to be far from the thread and involved in his technical role, he knew how to use the pressures of Kirchnerism to close a new agreement that should have been ready by the end of February, but that its extension It had generated some uncertainty.
AM / ED
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