2023-09-10 06:33:00
Alberto Fernández and Kristalina Georgieva during an informal meeting at the G20 summit in India
(Special envoy to New Delhi) Rodrigo Valdés, director of the International Monetary Fund (IMF) for Latin America, became the number 1 enemy of Alberto Fernández and Sergio Massa for his technical proposal of executing a strong adjustment of the national economy in exchange to recommend to the Board the essential disbursements to prevent Argentina from falling into default during July 2023.
Massa crossed Valdés in a zoom that will be remembered for a long time in the Treasury Palace and Alberto Fernández climbed to the White House to block that adjustment measure that was promoted by the IMF staff.
But the relationship of the director of the Fund with Alberto Fernández and Massa was forever broken, and a continuation of that crucial battle through other means is expected in the coming months. Valdés believes that his recipe is correct, and he will wait until November to insist on adjustment measures that Balcarce 50 should apply in a political era marked by a possible runoff and the transition to a new government.
The President assumes that Valdés will insist on the adjustment proposals and took advantage of his trip to New Delhi to question the technical and political criteria that the director of the Fund intends to apply to the Argentine case. Without mentioning Valdes, Alberto Fernández criticized the IMF staff during an informal conversation with Biden, who recognized the guerrilla war being fought between Washington and Buenos Aires.
Biden confirmed to Alberto Fernández that his National Security Advisor, Jack Sullivan, and the Secretary of the Treasury, Janet Yellen, tempered the adjustment demands promoted by Valdés and the technical staff that supports him. “We did what we might,” Biden said when the president expressed his discomfort with the IMF’s bureaucratic line.
Alberto Fernández and Joseph Biden during their informal meeting at the G20 summit in India
Still, there can be a perfect storm in November. The IMF board must approve the last disbursement in 2023, while political uncertainty would configure two alternative events: runoff or electoral transition. And within the second round – like a Chinese box – the question of whether Javier Milei will have Massa or Patricia Bullrich as his opponent is still pending.
Alberto Fernández bet a dinner in New Delhi in favor of Sergio Massa’s victory once morest Milei in an eventual runoff. But that electoral confidence will not serve to block the initiatives that Valdés intends to present to the IMF board before the end of November.
In this case, the president and the director of the IMF agree: Argentina will not arrive at that board meeting with the goals met, and there will be no logical mitigating factors supported by a drought that months ago imploded the national economy. It is already known that the absence of rain is a natural phenomenon different from the increase in public spending in the middle of the electoral campaign.
Alberto Fernández arrived in New Delhi with the intention of punishing the IMF for the intransigent position of Valdés and the staff assigned to Latin America. And he fulfilled that political objective during his first speech at the G20 summit.
Yesterday, early morning in Argentina, the head of state read: “Climate change altered all our plans and the International Monetary Fund, to which we are indebted, clung to its dogmas and showed itself incapable of innovating with new solutions to confront the catastrophe,” said Alberto Fernandez.
A few meters from the Argentine delegation, Kristalina Georgieva listened to the presidential criticism with a poker face. Before that speech she had had a long conversation with Alberto Fernández, and she was not surprised by her sour tone.
The dialogue between Alberto Fernández and the managing director took place in the VIP Zone of the G20 summit, and ended when the Prime Minister of India, Narendra Modi, called the inaugural session of the multilateral forum. It was not a formal conclave, they met by chance and the head of state took advantage of the opportunity.
-The staff played once morest us. “We had an agreement, and they didn’t respect it,” said Alberto Fernández.
“You’re right,” Kristalina Georgieva answered laconically.
Alberto Fernández understood that the managing director was open to listening to his criticism, and moved forward without diplomatic euphemisms.
-It is Valdés who proposes adjustment measures. Measures that cannot be done. “He proposed things that make no sense,” the President added.
–The drought complicated everything. If they had not met the goals. “I know,” Georgieva replied.
–Okay. But you put it to Valdés. And now it complicates things for us…- Alberto Fernández insisted.
-I didn’t put it. “It wasn’t my decision,” Georgieva closed.
Rodrigo Valdés, director of the IMF for Latin America
Alberto Fernández and Georgieva always had a good relationship, despite the managing director’s unfulfilled promises. Georgieva assured the president that the IMF board would reduce surcharges in November 2021, and that never happened. The surcharges imply regarding 1.2 billion extra dollars per year that Argentina must pay for the 44 billion dollar loan that Mauricio Macri took out in 2018.
Martín Guzmán began the crusade once morest flight attendants when he was Minister of Economy and Sergio Massa continued with that task, similar to a political chimera. Alberto Fernández and Georgieva analyzed this issue – once more – at the G20 summit in New Delhi. It was déjà vu: they had already done the same thing at the G20 in Rome and Bali.
However, the president was enthusiastic. The managing director promised an institutional decision before the end of 2023. And Alberto Fernández was able to confirm, outside the bureaucratic structure of the IMF, that the board is ready to discuss the viability of the surcharges.
There are still no details regarding the date of treatment and the depth of the decision to be made. Alberto Fernández believes that it would be the total elimination of flight attendants, a working hypothesis that clashes with the lifestyle of the officials who work at the IMF: these extra funds finance the trips, meals, suits and per diems of the nomenclature that complies with the orders – in the case of Latin America – of director Valdés.
A few weeks before concluding his term, the president assumes that there will be a bittersweet last chapter in Argentina’s relationship with the International Monetary Fund. This value judgment implies that there would be a new offensive to adjust the economy – in the midst of the electoral outcome – and the possible institutional recognition of the abusive burden imposed by surcharges on debtor countries.
“Trust me. You’ll see. There will be a triumph for you,” Georgieva promised Alberto Fernández. Night was falling in New Delhi, while the skinny and sacred cows moved slowly in the middle of nowhere.
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