The head of the IMF spoke of the Argentine economy |...

“Argentina’s priority should be to deploy a credible economic agenda that allows balancing support for the economy and people in these difficult times and also ensuring that macroeconomic stability is taken into account. The most important task for the country is to show a roadmap that marks in which direction to travel and how to reach the destination ”, he said this Wednesday the head of the International Monetary Fund (IMF), Kristalina Georgieva, at a press conference when consulted by Argentina. In addition, he reiterated the need for greater global coordination for the restructuring of sovereign debts and asked governments not to withdraw fiscal stimuli prematurely.

At the formal opening of the Joint Assembly of the IMF and the World Bank, Georgieva considered that Argentina is going through “a deep recession, social conditions are worsening, economic imbalances are growing and also the divorce between the official exchange rate and the parallel it is expanding. ” However, he reaffirmed that the multilateral organization wants to “support Argentina” and be an “ally.” The country’s relationship with the Fund is resolved in the negotiation of a new credit agreement that will allow it to face the repayment of the mega-package of debt of 44 billion dollars of the agreement signed by former president Mauricio Macri.

After last week’s visit to the country by the Fund’s technicians, during which they held meetings with officials of the economic team, business leaders and trade unions, Georgieva assessed that Argentina “faces very dramatic challenges without easy solutions” and considered that “the most important priority is to implement a credible economic agenda.” The government’s intention is to obtain the financial package without having to resort to the classic recipes of adjustment and deregulation of the Fund. In this sense, the argument of the Minister of Economy, Martin Guzmán, is that in a context of crisis, more and not less public investment and protection of economic and social rights are needed.

The Fund and debt restructurings

For the Bulgarian economist, a central part of the current global challenges agenda consists of “improving the international architecture for simple resolution, at a relatively low cost, in situations where debt is not sustainable.” “Until now, the private sector He did not want to participate and the public sector did not ask him to do so, thinking that it would harm access to markets, “he lamented, in relation to the little progress in debt restructuring in the world.

Georgieva specified that “of 44 that signed up to resolve the debt crisis, only three had interaction with the private sector and they are still unsolved”, in relation to the poorest countries that signed up to request relief from their debts in the framework of the pandemic. At this point, he mentioned Argentina along with Ecuador as recent examples of economies with debt crises that went through a restructuring of bonds in the hands of the private sector. According to Georgieva, these cases provide hope that, in the future, private sector participation in the restructuring negotiations will increase.

The managing director of the IMF insisted on the issue of public debt and recalled that the organization “presented to the G20 the perspective on the international architecture of the debt, with a commitment to deal with equitable debt, together with all creditors and with greater transparency, with a clear fund for restructuring the debt of countries in crisis ”.

Crisis and uncertainty

In recent months, Georgieva acknowledged, “the picture of the global economy has gotten somewhat less bad, but we continue to project the worst recession since the Great Depression.” “More than ever, we must work together: a crisis like no other requires a recovery like no other. The darker the night, the brighter the stars, ”he graphed.

On the global economy, Georgieva urged countries “to take the right measures now” and in particular requested that they “not cut financial lifesavers.” “Bearing in mind the high level of uncertainty, what worries me the most is that support for workers and companies will be withdrawn prematurely, since it would unleash a wave of bankruptcies and a massive increase in unemployment. I am concerned about the scars, the consequences from this crisis, such as structural inequality and unemployment, “concluded Georgieva. When it comes to financing fiscal expansion, the IMF suggests progressive tax increases in the case of countries with few financing channels.