The agreement between Argentina and the International Monetary Fund (IMF) entered the Chamber of Deputies this afternoon and on Monday it will begin to be debated in the Budget Committee of the Lower Housea, with the presence of the Minister of Economy, Martín Guzmán, and other officials of the Executive Branch.
This is the first time that an agreement with the IMF has been sent to the National Congress for approval.
The shipment consists of four documents: the bill with four articles, the message from the Executive Branch signed by President Alberto Fernández and two attachments.
This is the Extended Facilities Program for the purpose of refinancing the existing debt between Argentina and the IMF, made up of the “Memorandum of Economic and Financial Policies” and the “Technical Memorandum of Understanding”, as well as the corresponding annexes.
The draft law on the agreement with the IMF by Telam on Scribd
The details
As specified this Friday, the new program -called Extended Facilities- has a duration of 2 and a half years in terms of the commitments assumed, and It is a refinancing of the debt taken during the Macri administration.
The agreement will have 10 reviews and they will be quarterly with disbursementswhile the payment of the same will be between 2026 and 2034, earning 4 and a half years “without sacrificing” money from Argentina to pay debt in these two and a half years, official sources highlighted.
“The best available options have been taken within the limited tools provided in the IMF program portfolio, so as to prevent Argentina from incurring arrears with the agency, which would generate immeasurable damage to the post-crisis recovery of the country. economy and in the framework of the pandemic in which we are still immersed”, the Executive asserted in the fundamentals.
“Institutional responsibility”
The national government asked the legislators for “institutional responsibility” in dealing with the agreement with the International Monetary Fund (IMF), in the message accompanying the bill sent to Congresswith the understanding signed with the international organization.
“Appealing to the institutional responsibility of each and every one of the deputies, of the senators and the senators, urgent treatment of this project is requested of Law by which the Extended Facilities Program is approved in order to refinance the existing debt between the Argentine Republic and the International Monetary Fund”, says the message sent to Congress.
The document bears the signature of President Alberto Fernández; the Chief of Cabinet, Juan Manzur and the Minister of Economy, Martín Guzmán.
The message that accompanies the project by Telam on Scribd
The keys to the deal
The national government announced the main keys of the agreement, which it considered “the only way to face the commitments assumed” by the management of former President Mauricio Macri, who left as a legacy what he characterized as “brutal expirations”.
“We ask the Fund for money to pay the Fund the maturities of that loan and thus improve the profile of net maturities with respect to the unsustainable one that Together for Change left us and that Argentina can continue to grow,” said the Executive.
The Extended Facilities program that “replaces the failed Stand By of 2018”, it has a duration of 2 and a half years and will have 10 quarterly revisions.
In this way, said Economy, “four and a half years are gained without sacrificing money from Argentina to pay debt in these two and a half years”
The first disbursement from the IMF will be US$9.8 billion.
“This agreement is the only way to meet the commitments assumed with the IMF by the previous administration (given that the IMF does not accept debt restructuring),” he pointed out, while specifying that, “without the new program, Argentina could not face the brutal maturities agreed by Together for Change in the “Stand By” program of about US$19 billion in 2022 and US$23 billion in 2023.
In addition, the “unusual” character of the program was reiterated, which was achieved “without adjustment policies and with an increase in real spending in every year.”
Consequently, the agreement “allows a passable path for our country with greater predictability, certainty and vision of the future,” they assured the Government.
Massa ratified the schedule, which starts on Monday
The president of the Chamber of Deputies, Sergio Massa, ratified the schedule that will take place from Monday to debate in committee the agreement with the International Monetary Fund, which will be developed with the presence of officials, trade unionists and governors; and called for “responsibility” from all the sectors involved in the discussion.
“The bill that puts into consideration the agreement that Argentina has reached with the International Monetary Fund is going to be admitted. On Monday, the Chief of Staff (Juan Manzur) and the Minister of Economy (Martín Guzmán), the The president of the Central Bank (Miguel Ángel Pesce), the secretary of the Treasury (Raúl Rigo) and some other officials from the economic team are going to be reporting in Congress to the Budget Commission of the Chamber of Deputies,” Massa indicated during a activity in the province of Tucumán.
Meanwhile, for Tuesday “civil society organizations, the CGT, the CTA, the business chambers and the governors will be invited to express their position on the support or not that they can propose for the agreement of Argentina with the IMF,” Massa specified.
Finally, “on Wednesday we are going to start the free debate and we are going to try to build as much consensus as possible to give to the government and to Argentina.”
Massa recalled that “this is not a debt of President Alberto Fernández”, but “it is a debt of Argentina and the governments are circumstances in the history of the countries”.
“We believe that in the best way and with the greatest responsibility we are going to solve the problem and try to find a solution,” he said.
“We appeal to everyone’s responsibility, to seriousness in the debate, to the search for a solution for Argentina and not for a small political difference to try to position itself better or worse in front of the electorate,” he said.
In addition, he pointed out that the debt with the IMF is an issue “that transcends even our generation, because the debts that Argentina assumes are often debts of 10 or 20 years.”
In line with this, he called for “a responsible look at the medium and long term to start down a key path: fiscal balance, trade surplus, competitive exchange rate, and accumulation of reserves, which are all tools that allow us to carry forward the investments like the ones we have come to announce today in Tucumán”.
