Alberto Fernández bets on global diplomacy and his green agenda to facilitate debt negotiation with the IMF

Alberto Fernandez at the Glasgow climate change conference

(Special Envoy to Glasgow). Alberto Fernández recognizes in public and private that Argentina does not have 19,000 million dollars in reserves to pay the International Monetary Fund (IMF) the successive capital installments that expire in 2022. But the President wants to honor the debt that Mauricio Macri contracted and to fulfill that promise he deployed a strategy that is based on tough negotiations with Kristalina Georgieva, the green agenda to meet the goals of the Paris Agreement and the arts of diplomacy to add supports of the main powers of the world.

Martín Guzmán yesterday negotiated with Julie Kozack, deputy director of the IMF’s Western Hemisphere department, While Luis Cubeddu -the head of mission of the IMF- and Sergio Chodos, Argentine representative in the Fund, appeared in a zoom from Washington. There were 12 consecutive hours of dialogues and pulling that took place in a Roman bar and in the Argentine embassy in Italy.

Alberto Fernández was in Glasgow yesterday participating in the Climate Change Summit (COP26), and in permanent contact with its Minister of Economy. When the sun fell on the 7 hills, Guzmán reported the news that can be summarized in a single line: there are no great advances, but the parties preserve the will to agree.

The information transmitted from Rome seems petty, If the details of the different conversations that Alberto Fernández and Guzman had with Kristalina Georgieva – managing director of the IMF -, Geoffrey Okamoto – deputy managing director of the IMF – and Kozac – deputy director of the IMF – during the G20 in Rome are not known.

Georgieva endorsed that Argentina can use the future Resilience Fund to add more time to the 10-year term that is set for Extended Facility loans. It is called the clause Pari Pass that the president reiterated to the managing director during their last meeting in Rome.

“Kristalina accepted that clause. And I asked him to put it in writing so that it would serve in the future “Alberto Fernández commented after dining at the Double Tree Hotel in Edinburgh.

Alberto Fernández and Kristalina Georgieva during their last meeting in Rome
Alberto Fernández and Kristalina Georgieva during their last meeting in Rome

Along with the possibility of applying a clause of Pari Pass, the IMF does not rule out granting a pardon (waiver) to Argentina, if no agreement is reached by March expiration. That is to say, in the face of the will to agree and in the face of imminent maturity, the Fund authorities would grant an extra payment term to avoid the default process.

This matter and its probabilities were also discussed in reserve between Alberto Fernández and Georgieva.

Mitigating laws that the IMF and Alberto Fernández are trying to design to avoid a financial crisis, do not have enough capacity to hide a fact that is proof of denial: Casa Rosada and the Fund have not yet agreed on the bases of the economic program that the board must approve to grant the Extended Facilities credit.

The possibility of using the Resilience Fund credits as a direct continuation of the eventual Extended Facilities agreements, plus the eventual use of the waiver in the absence of an agreement in 2022, They are initiatives designed at the IMF that complement a new proposal made by Alberto Fernández at the Glasgow summit.

In his first speech to COP26, Alberto Fernández suggested that the IMF agree to exchange debt for projects that respect the environment, He proposed that Special Drawing Rights (SDRs) be used to finance initiatives against carbon emission and proposed creating a political and technical committee to decide which countries are going to receive green credits for the defense of the environment.

The debt swap for green projects, the use of SDRs, s and the G20 suggestion to the IMF to review your surcharge policy, They are possible long-term financial instruments that show a new perspective on a global system that completed its cycle after the COVID-19 pandemic and its social and economic consequences.

Alberto Fernández and Yanet Yellen, Secretary of the Treasury of the United States, talk during the G20 in Rome
Alberto Fernández and Yanet Yellen, Secretary of the Treasury of the United States, talk during the G20 in Rome

Nevertheless, These eventual financial instruments have a structural weakness that blocks their ability to be used in this negotiation with the IMF.: do not exist yet, and what does not exist cannot be used against Georgieva and the main countries -the United States, Germany, Japan, France and Canada- that make up the board of the Fund.

Apart from the legal and financial tools that it intends to deploy to close with the IMF; Alberto Fernández uses diplomacy to bring positions closer to the main leaders of the world. The president already knows that an accomplice wink, a chance place at a formal meal, or a scathing comment can narrow the differences on a complex issue with the status of a matter of state.

Alberto Fernández shared the official G20 dinner with Jill Biden, commented his paternity with Boris Johnson, exchanged palace gossip with Ursula von der Leyen, spoke in depth with Angela Merkel and he was a direct witness to the personal revenge that Emmanuel Macron carried out against Jair Bolsonaro for having attacked his wife Brigitte.

The G20 dinner was ending and Bolsonaro was only walking towards the exit when he crossed paths with Alberto Fernández, his partner Fabiola Yañez, and the Macron couple. Bolsonaro saluted as he passed and tried to get out of the situation quickly. There, everyone remembered that the president of Brazil had mistreated Brigitte Macron.

The French premier broke away from the group and crossed Bolsonaro with a smile.“How are you, President. He introduced him to my wife, Brigitte. “

Bolsonaro’s face was irreparable. He barely managed to say hello, and he almost ran to his official car.

Macron, Brigitte, Fabiola and Alberto Fernández almost choked with laughter.

The president has already been confirmed that he will have a video conference with Vladimir Putin to analyze -among other matters of state- the negotiation with the IMF. It will happen this Friday, and it is not yet known if it will be in Olivos or in Balcarce 50.

“I want to arrange with the Fund. If not, what sense would it have been to have paid 1,900 million dollars with the money that Georgieva sent me ”, Alberto Fernández commented last night, while having dinner at the Double Tree Hotel in Edinburgh.


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