Martín Guzmán: “The IMF may lose legitimacy if it pushes Argentina into a destabilizing situation”

Economy Minister Martin Guzman warned Tuesday that the International Monetary Fund (IMF) “may lose legitimacy if it pushes Argentina into a destabilizing situation.” If the IMF pushes Argentina into a destabilizing situation, it will also have less legitimacy in the future, when other countries require multilateralism to be able to solve their problems with the international community,” said the head of the economic portfolio. Speaking to the News Agency France Press, Guzman said that “the outlook for 2022 can be very virtuous, since Argentina has a very high trade surplus. It was over $15 billion in 2021.” What is the balance of payments problem facing Argentina in 2022? -he said-. It is precisely the debt to the IMF. It is the reverse of what naturally happens. It is the debt to the IMF that generates the balance of payments problem. And that’s why it’s important to be able to refinance it. It is important for the country and also for the IMF.” On the fiscal differences that today block an agreement with the Fund, he said: “There is practically agreement on where to converge, what is the primary fiscal result. The difference is in the speeds and that has to do with the fact that different targets are being looked at. In 2021, with an economy growing at 10%, the primary fiscal deficit fell 3.5 points of Gdp (Gross Domestic). The fiscal deficit of 2021 was between 2.9 and 3% of GDP, this figure will be known on January 20. It’s a very strong fall. Virtuous fiscal consolidation is taking place.” What the IMF has proposed, he continued, is that there must be faster fiscal consolidation. But there are two problems: the first is that the way they put it would halt the economic recovery in the short term. The second is that the point at which the fastest fiscal consolidation would focus would be on a minor expansion of investment in public infrastructure. For us that is critical, because that investment is what Argentina needs the most, from the productive point of view. That’s where the tension is.” The head of the Treasury Palace said that Argentina wants to “fulfill” its commitments, but said that for this “we need time.” “We need to be able to refinance this debt. We need that for that time they do not charge us a conditionality such that it stops the recovery and that inhibits Argentina’s development capacity in the medium and long term,” he added. If we want to protect each other and protect the functioning of multilateralism, it is important to agree on something that is credible. And credible means implementable,” he said. Argentina is in the final stretch of negotiations with the IMF, taking as a deadline March, when US $ 2,873 million of the loan of 44,000 billion that the credit agency granted in 2018 to the government of former President Mauricio Macri matures.At this time, Foreign Minister Santiago Cafiero is in the United States to meet with the Secretary of State, Antony Blinken, to obtain the support of that country in the negotiations with the Fund.

Original source in Spanish