In a nationally televised speech yesterday, Argentine President Alberto Fernández announced that his government had reached an agreement with the International Monetary Fund to restructure $44 billion of the $57 billion mega-standby agreement contracted by the neoliberal President Mauricio Macri in 2018. This new agreement, known as an extended fund facility, is a “reasonable and possible solution,” Fernández said, one that doesn’t impose austerity, doesn’t demand labor or pension reform, and allows for public investment in infrastructure and science and technology. “We had a rope around our neck, a Sword of Damocles hanging over us,” he said, but “now we see a path forward that will allow us to exercise our sovereignty, and move forward with our policies of growth, development and social justice.” (https://www.pagina12.com.ar/398278-acuerdo-con-el-fmi-el-discurso-completo-de-alberto-Fernández)
The announcement came at the end of a week of tense negotiations between Finance Minister Martin Guzman and Fund officials, in which it was rumored that Argentina would not make a $731 million payment due Jan. 28, with another $380 million in interest due on Feb. 1, unless a commitment to an agreement came from the Fund. Reportedly, the government did make a payment of $717 million yesterday. However, this is not a final agreement—nothing has been signed officially. The Fund did issue a press release yesterday indicating that the two sides had reached an agreement on “key policies,” but underscored that its Executive Board will have to grant final approval. (https://www.imf.org/en/News/Articles/2022/01/28/pr2218-argentina-imf-staff-statement-on-argentina)
The Argentine Congress will also have to approve any agreement. The government hopes one will be signed before mid-March, when $2.8 billion comes due according to the terms of the old standby agreement. If it remained in place, that agreement would require a total of $18 billion to be paid this year and $19 billion in 2023—all, of course, unpayable.
