translated from Spanish: MACRI-Pichetto: The blessing of the markets and the hope of the IMF

In a tweet, the current President Mauricio Macri announced that his partner would be nothing more or anything less than Michelangelo Pichetto, who was president of the Peronist Party (PJ) in the Senate of the nation for 17 years, although his career within the party meets More than 35 years.

For all this we will need to build agreements with great generosity and patriotism where all Argentines who share these values contribute from their place. For all this I want to announce that Miguel Ángel Pichetto will accompany me as a candidate for vice president of the Nation — Mauricio Macri (@mauriciomacri)
June 11, 2019

The markets reacted strongly at that hour and a half end of the day. There was an increase of 5.02% in the Buenos Aires stock Exchange and record of the Merval. In turn, the country risk yielded more than 9% and receded to 849 points. Another point that reflected the enthusiasm generated among local investors was the volume negotiated in shares that exceeded 1,773,800,000 pesos, 84% more than the previous day and the highest since September last year.
«Pichetto blew up the bag,» said the stock exchange operator Eduardo Fernandez de RavaOnline

On the one hand, there is confirmation from the current president in the official formula but the message of adding a classic Peronist changed the picture. Political analyses abound but economically: what do you mean? At this point you have to see beyond December, beyond the elections and bring to who is our main creditor to the scene. The IMF’s Hope
When we talk about 2020 we have to talk about the maturities of debt that are approaching. Although this year is already guaranteed that we will be able to meet the agreed payments, because still funds are in the loan stand-by, we can not say the same for next year. Default, restructuring, longer term or even increase the amount of the loan are the options that are shuffled over the state of the Argentine economy after three years of strong external debt, with more than 75% of the debt in foreign currency. The maturities currently raised are impossible to pay, even if Dujovne says otherwise. At this point, it is clear that the IMF does not care about the path that our country takes, we are 61% of its loans worldwide, we are its main debtor.

One of the four criteria that the Government has to meet in order for the IMF to continue to disburse an «exceptional» loan is to demonstrate that it has the «political capacity to implement the adjustment.» In October, the support that Pichetto gave them was key to prove it. pic.twitter.com/ScGsUN4YRN — Sebastián Soler (@TommyBarbanBA)
June 12, 2019

In this key, the figure of Pichetto appears as one who can achieve sufficient consensus to achieve what we change could not: Labor reform and pension. Two aspects that are central to the IMF and do not seem willing to put aside at the time of, for example, extending payment terms. It is worth remembering the social conflicts generated by both bills, which in a context of strong fall in purchasing power for both workers and retirees is not clear how it would be implemented. However, the pressures are so many that the pressure seems to have achieved the impossible, a Peronist in change. The blessing of the markets
The current senator was in April on tour in New York, where he joined with banks and investment funds to ratify the agreement with the Fund, criticize the positions that question the fulfillment of payments and finally, support the official economic policy. An institutionalist Peronist, a friend of the markets who already gained investor confidence in the search for governability needed to return funds and a political animal that has arrived at senators and governors.
«Argentina has a number of international commitments. He has to face those commitments, he has to try to see how he reformulates them if he cannot, but everything has to be done in the framework of the common agreement, «Pichetto said today.

The happy markets, they understand that the senator gives to the presidential formula the political waist that MACRI did not have nor has. The sample of this was evidenced yesterday with the good performance of the bag and is ratified today with the fall in the price of the dollar, which already meets more than 45 days of stability.  The road to 2020
In parallel, the strategy to maintain the mandate is given with the death of Federal alternative and the possibility to re-establish the scream within Peronism. «The United Peronism always wins» seems one of those revealed truths of Argentine politics, then the strategy of generating a new rift makes sense.

If this step costs you to change (or the name you adopt) the vote of the hard antiperonism will then go to Lavagna and return in a eventual ballot to Acobijarse on the antiK side. However, the sayings and silences of Schiaretti and Urtubey can mark the court whether Pichetto’s decision will be read as a personal betrayal or as a fragmentation of the party that installs a relodead of the rift. You look at the elections. In this note:

Original source in Spanish

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