Argentina's cabinet chief on Monday hit back at the United States reacting to comments from the White House on the Argentine central bank reserves saying he was worried about the US and UK debt levels, the US debt reaches over 100% of GDP.
We have expressed our concern regarding the US because its public debt is over 100% of GDP and because they have trebled their monetary base. Similarly with the UK which has increased five-fold its monetary basis, and has had no impact on inflation. Nobody has mentioned that Argentina has reduced its monetary basis 50%, said Jorge Capitanich in his daily briefing at Government House in Buenos Aires.
According to La Nacion, the White House expressed concern because of the drop in the Argentine central bank international reserves and warned that the government should implement quick measures to address the situation. The US officials suggested that an agreement of Argentina with the Club of Paris, on the pending debt, could help the country recover some international financing.
However Capitanich said that the renegotiation of Argentina's foreign debt (following the default, and which was done in two stages 2005 and 2010) was 'the most successful in history' and added that 75% of the Argentine reserves have gone to pay debts, almost 178 billion dollars in the last decade, and debt not contracted by the current government.
He went on to say that this gained autonomy helped Argentina achieve the strongest growth in Latin America which among other things created six million jobs.
Thanks to this policy and the renegotiation of sovereign debt, I repeat the most successful in history, it has enabled that the adjustment of which everyone preaches did not fall on the back of the Argentine people, but more precisely that avoided adjustment saved the Argentine people and created jobs and better working conditions, underlined Capitanich.
Apparently Washington is not convinced about the latest measures adopted by Argentina and is waiting to see how Capitanich and his team address the loss of reserves which has been over 15bn since the implementation of the dollar clamp in 2011. International reserves in Argentina now stand below the 30bn mark and with no immediate prospect of change.
Although the Obama administration applauded and praised Argentina's recent decision to reach an agreement with several companies that had pending credits to collect from favorable rulings at the World Bank arbitration tribunal, it is now waiting for a similar action with the Club of Paris which involves 9 billion dollars (capital plus interest).
The share of the US in that package is low, 500 million dollars, but Japan and Germany expect to collect 2bn dollars each and they have lost patience with Argentina.
Washington has suggested that if Argentina moves in that direction, paying creditors, it would reconsider its negative vote to grant her credits, at the World Bank and Inter American Development Bank boards. Furthermore Argentina could then have access to Eximbank funds.
Likewise next Monday December 9, the IMF will reconsider Argentina's case regarding inflation and GDP stats, and check if effectively the country has advanced as promised on those issues ahead of 2014. Apparently Washington favors giving Argentina another break of six months and unconfirmed news have said that the new indexes unofficially shown to representatives from other countries, received an approval sign. It waits to see how the Argentine government will implement the new stats which should confirm an annual inflation of 25%, as marked by several provinces, and not 10% by the Cristina Fernandez administration.
Finally Washington is also concerned about Argentina's strategy in its battle with the hedge (vulture) funds. Cleary, Gottlieb, Steen & Hamilton who represent Argentina in the litigation case should be more emphatic appealing to the Foreign Sovereign Immunities Act and showing the danger for New York as a leading financial market, according to Buenos Aires media reports that interviewed the State and Treasury departments sources.
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Sad Argentina seems more aware of the problem than the idiots in Washignton DC and London.Dec 02nd, 2013 - 04:37 pm 0
If they think Argenina is heading towards a cliff, they are heading towards an ocean trench.
HAHAHAHA.Dec 02nd, 2013 - 04:38 pm 0
'Stamps feet' ......it's not fair, their inflation hasn't gone up!
And the real inflation figures for Argentina are.....................anyone guess?Dec 02nd, 2013 - 04:45 pm 0