MercoPress. South Atlantic News Agency

Argentina ratifies economic policy, rejects austerity measures to balance the budget

Lorenzino admitted that despite success, ‘vulture funds’ represent a very serious threat

Argentine Economy minister Hernán Lorenzino on Wednesday ratified current policies and “strongly” rejected an increase of budget austerity measures, while defending the debt reduction policy, but admitted the country “still suffers” from consequences of the international financial crisis.

The official spoke at an international seminar on “Development agenda and South-South integration”, held at the Banco Nacion headquarters organized by the Securities Commission, the Mothers of Plaza de Mayo Studies Centre and the Economy and finance centre for the development of Argentina.

Lorenzino pointed out that in emerging countries “expansive tightening” must be totally discarded since any tightening means “cooling the economy and loss of jobs”.

He added that the current debt reduction policy promoted by the government of President Cristina Fernandez means Argentina’s sovereign debt is less that 10% of GDP and with a 12 year horizon. Furthermore “with the capital and interest payments of next month that percentage will drop to 8%.

But, emphasized Lorenzino despite the successful restructuring of debt, “We still have to deal with vulture (hedge) funds which in our case want to punish the 93% of our creditors who agreed to out debt exchanges”.

Lorenzino concluded by recognising that, while the global financial crisis had left its mark on Argentina along with the rest of the world, it also represented an opportunity.

“We are still suffering from the international crisis, but we see it as a chance to design a new wave of ideas on a global scale, such as growth with social inclusion”.

In direct reference to the South-South issue, Lorenzino that “we have the opportunity to put back on the table issues that were never abandoned by our countries, but were not included in the international debate such as growth with inclusion and employment, job-creation”.

“These should be the objectives of world economic policy at global sacale” said Lorenzino adding that “we are seeing a structural change in global economic and financial relations between South-South countries. Besides, our nations are the most dynamic part of world expansion”.