After the rejection of the budget, Alberto Fernández will speak by videoconference with the director of the IMF

Alberto Fernández and Kristalina Georgieva dialogue through a videoconference that linked the Quinta de Olivos with the IMF in Washington

Alberto Fernández and Kristalina Georgieva will open today a new negotiation instance to prevent Argentina from falling into default in mid-March 2022. Through a videoconference that will link Olivos with Washington, The President and the managing director of the International Monetary Fund (IMF) will try to design a roadmap that allows the refinancing -in time and form- of the Stand-By loan of 44,000 million dollars that Mauricio Macri contracted when he occupied the Casa Rosada.

The virtual appointment is scheduled for 15, and Martín Guzmán is also expected to participate. The Minister of Economy and the managing director spoke last Saturday, and never thought that the presidential conclave would be reached with a resounding defeat in Deputies caused by the rejection of the 2022 budget.

The IMF watched with passive distrust the terms of the 2022 budget that the lower house finally rejected after a lengthy legislative debate. But he chose to approve Guzmán’s numbers to determine -among other institutional aspects- the degree of political consensus between the Frente de Todos and Juntos por el Cambio.

The parliamentary test confirmed the suspicions of Georgieva, the technical staff and the IMF board: Alberto Fernández and Guzmán are alone in a global negotiation that is progressing slowly and with an uncertain end. Not even Máximo Kirchner, the head of the bloc of pro-government deputies, had the political modesty to hide his internal differences with the President and his Minister of Economy.

At the IMF, you already know that Máximo Kirchner detonated a weak legislative agreement that would have allowed the 2022 Budget to be revamped and avoid a political defeat a few hours after the video conference that Alberto Fernández and Georgieva had agreed upon. The deputy swears that he was wrong: the head of state – in the solitude of Olivos – defined him as an irremediable arrogance.

In this political context, Alberto Fernández and Georgieva will resume a dialogue that was cold after the meeting in Rome. The President was late for his appointment with the managing director and the atmosphere of the meeting was so unpleasant that there was no official photo as planned.

What’s more, In the last hours it was confirmed that Georgieva cannot fulfill on the IMF board what was agreed during the G20 in Rome. During this multilateral conclave it was resolved that the board dealt with the possible reduction of the surcharges that are applied to the Argentine debt- 900 million dollars annually-, and none of that happened by decision of the United States, Canada and Japan.

But the most complicated thing for Alberto Fernández and Guzmán is that the Board of the Fund intends a sustainable program that does not coincide with the economic and financial proposals that were presented in recent weeks. The President and his minister have no intention of endorsing an adjustment plan, and the IMF board – with its technical requirements – demand the execution of a series of variables that are not accepted by the Casa Rosada.

It is true that the IMF staff endorsed – in its latest statement – a handful of measures that are already running in Argentina. However, these measures – a price agreement, more investment in technology and the distinction between speculative and investment capital – are not enough to outline an agreement with the Fund that will allow the refinancing of the $ 44 billion debt.

From this perspective, Alberto Fernández will insist on designing a program that postpones payments from 2022 -18,000 million dollars in total-, facilitates access to credit from multilateral organizations and the possibility of using -without delay- the Special Drawing Rights (SDRs) to mitigate the economic and social consequences of the global pandemic.

The defeat of the Government in Deputies crunches the negotiation strategy of the President and Guzmán. For now there is no budget for 2022, the Multi-Year Plan that should have reached Congress ten days ago has not been written, and the staff agreement with the IMF is still a draft that goes back and forth between Buenos Aires and DC.

The appointment is at 15. It will be a complex dialogue between Alberto Fernández and Georgieva. When the days go by and the danger of default is not ruled out in Balcarce 50 and the IMF.

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