Times are accelerating: the Government wants an agreement with little adjustment but runs out of dollars and the IMF awaits a more solid plan

President Alberto Fernandez, Minister Martin Guzman and Managing Director Kristalina Georgieva, in Rome last October

Is this the storm that precedes the calm? Impossible to know: very few people in the International Monetary Fund (IMF) and in the Government know precisely where the negotiations are to postpone the payment of Argentina’s debt.

However, some official statements and concrete gestures allow us to get closer to the situation, in the face of an objective fact: the Government wants to close as soon as possible because it has already run out of reserves to continue paying the IMF, for which it urgently needs to seal a new program .

The rush is from Argentina, which has a payment close to USD 800 million next Friday, another of more than USD 300 at the beginning of February and 3,200 million at the end of March, impossible to face.

The only pressure tool to which the Government could appeal is not to pay the 28 and bet that this decision generates “internal tension” in the Fund

An agreement would freeze those payments for three years and would allow him to count on disbursements if the staff approves the technical program every three months.

The only pressure tool that the Government could use is not to pay the 28th and bet that this decision generates “internal tension” in the Fund, although with the current local financial variables, the problem seems to be more of the Government than of the others.

The difference in the fiscal path between the Government and the IMF would be approximately one percentage point in 2022: 2.9% versus 1.9%.

Summit between the presidents of the USA and Russia, Joe Biden (l) and Vladimir Putin

The Government maintains – Economy Minister Martín Guzmán expressed it clearly – that it intends a more gradual approach, so as not to “drown” the recovery registered in 2021, although most analysts forecast that this year the economy will hardly grow by net terms.

On the other hand, the staff considers that, if the Government does not send a strong and fast signal, it will be increasingly difficult to control inflation and the incessant exchange rate gap.

In the middle, there is international politics: Foreign Minister Santiago Cafiero’s visit to Washington tried to get a wink from the State Department and seek a wedge with the Treasury that does not exist. There were slightly favorable statements from Undersecretary of State Brian Nichols and the reiteration of the request for the Government to present a consistent “economic plan”.

There are official sources that affirm that in reality both the staff and several shareholders of the Fund are already aware of the plan, although they do not agree with it or consider it solid.

Martin Guzman (Adrian Escandar)

The erratic official foreign policy does not help to weld a link that was affected by decisions around Venezuela, Nicaragua and Iran. In this regard, in Buenos Aires they raise their chests because the Government, after “forgetting” to request the capture of the Iranian official Mohsen Rezai -for the murder of 85 people in the AMIA building in 1994- in Managua, did so before Moscow. .

Russia is precisely the next stop for President Alberto Fernández, on a visit scheduled for the first week of February, just when Joseph Biden and Vladimir Putin measure forces around Ukraine. For this reason, some officials hope to have the announcement of a sealed technical agreement with the staff of the Fund before leaving by plane for Europe, although in the Palacio de Hacienda they prefer to opt for prudence without giving dates and in Washington they stick to the script to state that “talks continue” between both parties.

In any case, the announcement of a possible agreement will be just the first step on a long road that, if the official claim is fulfilled, will take 10 years of continuous quarterly reviews. For this reason, more than one official must (or should) be reading the book “Diary of a Season on the Fifth Floor” by Juan Carlos Torre, on the negotiations between the IMF and Argentina in the 1980s, to fully understand what is this game of continuous mutual attrition between the parties, both outside and inside the country, which includes the expected tensions within the ruling coalition once the agreement is launched.

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