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Montevideo, November 16th 2018 - 08:22 UTC

IMF and White House support Macri's economic reform program

Friday, May 11th 2018 - 05:39 UTC
Full article 12 comments

International Monetary Fund chief Christine Lagarde said on Thursday she is ready to aid Argentina and wants talks on a financing package to be finalized quickly. Lagarde said she instructed the IMF team to continue discussions on a loan program with the goal to “reach a rapid conclusion.” Read full article

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  • Enrique Massot

    Asking the IMF for help will only delay the inevitable for president Mauricio Macri and his team of CEOs. They're at the end of the rope and they know it.

    It all started with a big package of lies carefully enveloped in yellow paper and a lot of tinsel around.

    “We are not going to devalue,” said Mauricio in his famous debate with his opponent, Daniel Scioli, shortly before the 2015 election. ”We are not going to make adjustments (to the economy).

    Inflation, boasted Macri in another conversation, was going to be the easiest thing to tame.

    “My ability to do so will show my administration's efficiency,” he added.

    Macri defined his intentions this way: “We are going to leave in place what's well done and change what's wrong.”

    With this platform, Macri took control of a country that, contrary to the image conveniently conveyed by the mainstream media headed by the Clarin Group and La Nacion, was in acceptable shape even if some changes were necessary.

    In two and a half years, Macri and his team managed to devastate Argentina's economy, tying the country again to the iron ball of an oversized foreign debt.

    And they keep lying. You judge.

    Until this day, Hacienda minister Nicolas Dujovne keeps repeating like a broken record that the goal of the government for 2018 is 15 per cent inflation. Even when everybody else--especially after the hike of the dollar value--point to 20 to 30 per cent.

    Events caught up with the government's hypocrisy of criminally denouncing CFK for the use of “dollar future” (derivatives) as a mechanism to stabilize the peso, and their use of the very same procedure in recent days to try the same.

    A sad end for the hopes many electors put on Macri.

    May 11th, 2018 - 04:23 pm - Link - Report abuse -4
  • Jack Bauer

    @EM
    In keeping with my decision to not harass you over your opinions on Macri’s economic policies - which does not imply I can't make general comments on Argentina’s economic woes, every now and again - would just like to make a small comparison, regarding a political figure you complain that I defend…but before I go on, I would like to reiterate that I AM convinced Temer is a crook....very crooked.

    That said, let’s take a look at Brazilian inflation over the Dilma years : 2011 – 6.5%, 2012 – 5.8%, 2013 – 5.9%, 2014 – 6.4%, 2015 – 10.7%, 2016 – 6.3%, ;

    In 2017, Temer’s first full year in office , inflation dropped to 2.95%...Am not turning a blind eye to his corruption, far less to the consequences of the recession (which in a way, contributed to the inflation rate), but got to give it to him, he appointed a Minister of Finance and a president of the Central Bank who knew/ know what they were /are doing, and let them do their jobs….very differently to Dilma, a populist who (irresponsibly) thought she knew better, overruled them and drove Brazil into a hole. The simple reason why Brazil is still struggling to get out of it.
    Just a wee comparison between leftist, populist policies and those that are not.

    BTW, it wasn't me that downgraded you (minus points).

    May 11th, 2018 - 07:50 pm - Link - Report abuse 0
  • Enrique Massot

    @JB

    “...my decision to not harass you over your opinions on Macri’s economic policies...”

    Jack: Debate of ideas can never be bad. I never felt you “harassed” me over my opinions. Some posts in MP do resort to insult instead of arguments but they do not help themselves. So bring it on--print your ideas or opinions. We may disagree, but I welcome healthy debate.

    I will take your numbers are correct. I will not judge them because Brazil's economy is so different from Argentina's. (Just imagine how Mauricio Macri would boast if having Dilma inflation numbers). However, I inflation is only one econometric measurement that needs to be balanced against other numbers. For example, recession can lead to low inflation. (Not in Argentina, where we often have high inflation combined with recession).

    I will accept that leftist or populist governments were far from perfect in Latin America. However, I will submit that the plethora of rightist governments, either issued of elections or coups, have a very mixed record as well. What's needed is social and economic advancement for the majorities, ending centuries of elitism.

    Good you did not downgraded me...I rarely use the system myself.

    May 12th, 2018 - 03:33 am - Link - Report abuse -1
  • Jack Bauer

    @EM
    OK, we are starting to see eye-to-eye....debating, disagreeing, or even agreeing....but while you are right that “Mauricio Macri would boast if having Dilma inflation numbers”, these inflation rates were on the high side if compared to the target set by the central bank after the Plano Real got inflation under control...4.5 %, with a leeway of 2% either way. In retrospect, although Dilma's official numbers weren't ALL that bad (livable), due to the lies she told (in 2013/14) to keep the economy going while the lies weren't uncovered, makes one consider the possibility, and if real, to what extent could the numbers have been manipulated ?
    But referring to Brazil after the military, all governments were centre or left of centre....the big difference between the others and the PT, was the rhetoric and the populism....billions spent on propaganda and policies which 'fooled' the people without showing any long term sustainable results....the fact that there are more people under the poverty line now, than in 2002, is a sign that the PT failed. Even if one believes the PT's claims, the crisis they caused has undone about 99% of all alleged improvements.

    May 13th, 2018 - 12:29 am - Link - Report abuse 0
  • Enrique Massot

    Back to Argentina...the handful of MP commentators who sang the praises of Argentina president Mauricio Macri seem to be taking a well-deserved holiday.

    They used to aggressively criticize anyone who would dare to attack, or express doubt about the current government's economic and political measures. They were attuned to the Argentine government's discourse that free-market policies would attract massive foreign investment to the country, fueling growth and well being for the population thanks to trickle-down wealth.

    Instead, Argentines saw an unprecedented increase in foreign debt that went on to finance capital flight, tourism abroad, profit remittances, debt service and a flood of imported merchandise that displaced domestically-produced products. They continued to suffer two-digit inflation rates, unmoved in spite of pre-election promises.

    The party came to an end when some private investors began to migrate to more promising lands as the US hiked interest rates, and others just thought too much borrowing had put Argentina in a fragile position.

    Our Macri-loyal MP commentators failed to see it coming and appear to have nothing to say now.

    Come back, fellas. All is forgiven.

    May 13th, 2018 - 05:35 am - Link - Report abuse -1
  • Zaphod Beeblebrox

    EM,

    You had “nothing to say” to my previous comments so I repeat:

    “The country's economy is rapidly deteriorating”

    I believe that most of the figures indicate a gradual improvement. But you made the original claim so can you support it with some statistics that indicate the state of the economy such growth of GDP etc?

    An analogy:

    A: You are a student and have minimal income from benefits or some part time work, you are borrowing to make ends meet and are renting cheap accommodation in a dodgy part of town because that is all you can afford. Even though your energy bills are subsidised, you have reached the point of not even paying the minimum on your credit cards and are ignoring the inevitable letters.

    B: You graduate and get offered a reasonable job. On the basis of having an income you buy a house in a nicer part of town but you need a mortgage. You are now economically active and have an income that promises to rise if you work well, but the mortgage means that your debt has increased dramatically and in order to service that debt you need to pay a substantial amount of your new income on the mortgage. You also have extra expenses because you want to decorate and furnish the house and your energy bills are no longer subsidised.

    In your opinion B is much worse than A because the debt is so much larger, you still have to pay off those credit cards and your energy costs have increased but you are missing the fact that that debt is now being serviced by your economic activity and a large part of it is an investment in your future infrastructure and you are now more comfortable even if your free cash has not increased that much (yet).

    The debt is important but it is not the only factor. If Macri had done nothing to improve economic activity or infrastructure then I'd agree that he was continuing on a path to ruin, but the evidence is that the economy is actually growing and remember he is now servicing the credit card bills that CFK refused to pay.

    May 14th, 2018 - 05:02 pm - Link - Report abuse 0
  • DemonTree

    Hah, buying a house straight out of Uni? Yeah right. But you missed out the part where you bought a house you couldn't afford and were using your credit cards to pay the mortgage, only now they have refused to lend you any more and you are turning to the payday loan company in desperation. I bet that flat in the crappy part of town is looking pretty good right now.

    Of course that's not accurate, a country's finances don't work like an individual's, but that's just as true of the original analogy.

    May 14th, 2018 - 09:58 pm - Link - Report abuse 0
  • Zaphod Beeblebrox

    “Hah, buying a house straight out of Uni? Yeah right.”

    I did! OK, it was some years ago, it was a very small house, property prices were much lower than they are now and I was able to obtain a 100% mortgage but the principle is the same. Finances were tight for a couple of years, but it was definitely better than renting.

    May 15th, 2018 - 05:51 pm - Link - Report abuse 0
  • DemonTree

    Ah well, I know it was possible in the past but it's totally unrealistic now.

    Those 100% mortgages were a big risk, sort of like Macri's borrowing. Even if they had still existed, I would have rented and saved for a few years anyway to build up a deposit so I wouldn't have that worry. You evidently didn't take on more debt than you could handle, but Macri has done and now Argentina is stuck in a hole.

    Probably he was hoping to improve economic activity a lot more, which would have made the debt less of a problem, but his policies just weren't very effective.

    May 15th, 2018 - 08:40 pm - Link - Report abuse 0
  • Jack Bauer

    It comes down to Macri and his government being able to transform those $ 30 billion in to productive resources to enable paying off the loan...if he uses the loan to finance improductive activities (as listed by EM), forget it.

    May 16th, 2018 - 04:08 pm - Link - Report abuse +1
  • Zaphod Beeblebrox

    DT,

    “Those 100% mortgages were a big risk, sort of like Macri's borrowing.”

    Maybe, but the thing that caused me most problems later on was the mis-selling of an endowment mortgage. If I'd had repayment mortgages in the early years then my outgoings would have been similar but at least I'd have been paying down the loan to some extent which would have provided some cushion when the property crash of the 90s came along. Hindsight is a wonderful thing.

    JB,

    ”It comes down to Macri and his government being able to transform those $ 30 billion in to productive resources to enable paying off the loan...if he uses the loan to finance improductive activities (as listed by EM), forget it.”

    Absolutely! He seems to have invested in infrastructure, removed some barriers to trade, removed subsidies and made efforts to reduce corruption etc. which are improving the country's productivity but will it be enough soon enough? We shall see...

    May 16th, 2018 - 05:59 pm - Link - Report abuse 0
  • DemonTree

    @ZB
    I think my parents had one of those, they were sold as a way to pay off the mortgage and hopefully have some money left over as a bonus, right? Of course, when put to the test the results showed otherwise.

    In the same way, Macri's policies can be judged on their results, no? Just because he wasn't a Kirchner and did a few things right doesn't mean they were good overall. He had other options.

    By the way, after saving for my deposit, I got a normal repayment mortgage and had no problems with it.

    May 16th, 2018 - 09:50 pm - Link - Report abuse 0

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