MercoPress, en Español

Montevideo, September 18th 2020 - 20:23 UTC

 

 

Foreign debt must wait: “the pandemic and Argentines' health are priorities”

Tuesday, March 31st 2020 - 12:58 UTC
Full article 30 comments

Honoring foreign debt will have to wait because given the coronavirus pandemic priority is now the health of the Argentines, said president Alberto Fernandez on Monday, adding he would not let local companies fire o declare workers redundant. Read full article

Comments

Disclaimer & comment rules
  • Jo Bloggs

    Argentina saved by the bell.

    At least this year we won't have to put up with any of the slimy grubs hanging around during our most special period of the year: 01 April - 14 June.

    Mar 31st, 2020 - 05:43 pm - Link - Report abuse +3
  • Marti Llazo

    The Fernández government was going to default massively on present debt even before the recent plague set in. Argentina has no shortage of excuses for not paying its debts.

    Apr 01st, 2020 - 12:48 am - Link - Report abuse +4
  • Jo Bloggs

    Marti

    Of course. The (Covid 19) bell has presented itself to Argentina for presentation purposes only and has likely made little difference to actual outputs.

    Still, like I said, it will be nice not having to put up with lots of the slimy grubs flaunting their presence in sloganised olive green apparel, smug in the knowledge that they are causing upset and that our adherence to the laws of our land mean that there is little that can be done about it.

    Unlike what the world witnessed in Patagonia several years back.

    H982 FKL

    Apr 01st, 2020 - 11:35 am - Link - Report abuse +4
  • Enrique Massot

    ML

    Wrong on all counts.

    Argentina has maintained its will to pay its foreign debt. However, the previous government has piled up maturity dates in a very short time, which makes impossible to meet the payment dates. As a result, president Alberto Fernandez has said the country will need more time to pay, and probably a haircut of dimension and shape still not determined.

    IMF managing director Kristalina Georgieva has agreed that Argentina's private foreign debt is “unsustainable.”

    This all was before the Covid-19 pandemic, which our MP expert commentator Marti L. has called Argentina's “excuse.”

    Shameful comments that put ML in close competition with D. Trump and J. Bolsonaro.

    Apr 02nd, 2020 - 06:52 am - Link - Report abuse -5
  • Jo Bloggs

    Marti

    You should be ashamed of yourself making such allegations. LOL

    https://en.mercopress.com/2020/02/10/cristina-fernandez-argentina-will-not-pay-even-half-a-cent-of-its-imf-debt-until-the-country-exits-recession

    Apr 02nd, 2020 - 09:26 am - Link - Report abuse +5
  • Marti Llazo

    Reeky, you are delusional as always. Both Fernandez made it clear that they would default, shortly after being elected. A haircut is a default. A delay in payments is a default. A unilateral restructuring is a default. Before you make silly representations that reveal both your argentinicity and your ignorance (well, that's redundant) then you should learn what it means to default.

    Apr 02nd, 2020 - 01:29 pm - Link - Report abuse +3
  • Chicureo

    Argentina is about to lose the pandemic excuse for debt repayment delay anyway...

    As I've repeatedly mentioned to many of the naysayers commenting on Mercopress, a widely available, low cost and effective treatment has been proven in several trials to be effective. It does not cure the virus, but is saving lives.

    https://youtu.be/NyDjJ5ytc54

    (And yes, I'm very aware of the conflicting reporting in the mainstream press.)

    ¡Salud!

    Apr 02nd, 2020 - 03:07 pm - Link - Report abuse +1
  • Jo Bloggs

    Rearrange the letters below, still using them all, to make another word:
    ARGENTINO

    Answer:
    IGNORANTE

    Apr 02nd, 2020 - 08:28 pm - Link - Report abuse +1
  • Enrique Massot

    During four years in government, Mauricio Macri accumulated an unprecedented amount in foreign debt, taken at very high interest rates, with short maturity dates and nothing to show in terms of results.

    Lenders knew about Argentina's past defaults, but they took a chance because the possibilities of making benefits not being available by other countries.

    Currently, president Alberto Fernandez is negotiating with creditors an agreement that would allow:

    Argentina to pay back.

    Creditors to get their money back -- or at least part of it.

    If there is an agreement, there will be no default. If Argentina is pushed into a corner, then perhaps the country will need to suspend payments. Argentina does not wish to be in such situation.

    Of course, MP readers such as ML and JB are hoping for the worst, circling around and smelling blood.

    Apr 02nd, 2020 - 09:39 pm - Link - Report abuse -2
  • Marti Llazo

    Perhaps if I speak more slowly , Reeky will understand. No, not even that will help. What part of “default” do you not understand, Reeky?

    Even before the election last year, the FF were plotting HOW to default. After all, what could be more Peronista than not paying the bills? When you say that you “need more time” that is essentially a confession that you are going to default. Could Reeky be so argentine as to not understand that unilaterally changing the payment scheme is .... default? It doesn't matter whether an earlier government had affected the amount due, it's in your court now and if you represent that you are not going to pay the full agreed amount at the agreed time under the agreed conditions then that is saying you are going to.... default. The Fernandez indicated that they were, from the beginning of their latest reign, going to... wait for it.... default !!

    Apr 02nd, 2020 - 11:36 pm - Link - Report abuse +2
  • Jo Bloggs

    ‘Is de fault of others, amigo.’

    Chuckle chuckle chuckle.

    Apr 03rd, 2020 - 09:58 am - Link - Report abuse +1
  • Marti Llazo

    Maybe Reeky can tell us why Argentina has such a high mortality rate from the COVID-19 plague, with its much-vaunted public health care system, while Chile -- with mostly privatised health care-- has about the lowest mortality rate despite proportionately a much larger number of those infected.

    Apr 04th, 2020 - 12:54 am - Link - Report abuse +1
  • Pugol-H

    I suspect the real problem for Argentina is going to be funding the large amount of spending needed to counteract the economic effects of the pandemic.

    Countries/blocks are having to spend hundreds of billions/trillions to maintain viable economies through this.

    Mostly funded through additional borrowing, Argentina will be no different,
    good time to be in the money lending business, if you have that kind of money.

    Going to be difficult however for Argentina to raise more loans when you are already defaulting on existing ones, for whatever reason.

    At least at an interest rate Argentina could ever hope to pay for any length of time.

    Italy, Spain will eventually get some sort of help from the EU to re-start their economies, be it coronabonds or some other mechanism.

    Where can Argentina turn for the kind of help needed to do that?

    Apr 04th, 2020 - 04:02 pm - Link - Report abuse +1
  • Marti Llazo

    Pujol-

    Who is going to loan any money to Argentina now? They've pretty much shown their cards. Or card. Their one card. The one that says “Default No Matter What” on it. And right now they're spending even more hundreds of millions, in money they don't have.

    Apr 04th, 2020 - 07:46 pm - Link - Report abuse +1
  • Jo Bloggs

    Marti

    Not only is the Argentine government spending even more money than they can afford now- and they’re not the only country by far- but they still found time to offer the Falklands assistance. I am not underestimating how serious Covid 19 is but I’d rather ride it out here with more than 4 times more doctors, nurses and ventilators per capita than Argentina; and enough money in reserve that we won’t have to borrow money to pay for the fight.

    Apr 04th, 2020 - 10:32 pm - Link - Report abuse +1
  • Pugol-H

    “offer the Falklands assistance” an entirely political act, not to be confused with any sort of humanitarian gesture.

    Which was declined, quelle surprise.

    https://www.clarin.com/opinion/malvinas--llaga-abierta-persiste-indiferencia-huellas-pasado_0_7ZveGwBJ.html

    An interesting read, the author concludes:

    Argentina parece una lejana comarca en el inconciente de esta sociedad multiétnica. En caso de tener la fortuna de pisar este suelo soñado, todo indica que nos queda reservado apenas un rol secundario, como meros observadores de un universo distante.

    Apr 05th, 2020 - 12:44 pm - Link - Report abuse 0
  • Enrique Massot

    It's soooo touching to see MP commentators wondering how Argentina is going to get out of its foreign debt/domestic stagnation situation.

    “Where can Argentina turn for the kind of help needed to do that?” worries Pugol-H.

    Well...worry not, dear white knights. If Argentina pursues the direction the current government had already designed before the pandemic hit, the country will get out of the morass -- even from under the added weight of the coronavirus crisis.

    The country's recuperation will set up a textbook case that economists and political science scholars will be able to contrast to the Macri administration, which in four years managed to create a gargantuan foreign debt and crippled the country's incipient domestic sector of the economy, all but destroying the population's purchase power.

    Most importantly, this will be done by relying mainly on the country's own natural and human resources -- as opposed to waiting for a magical solution coming from abroad as the previous administration did.

    Apr 05th, 2020 - 09:14 pm - Link - Report abuse -2
  • Marti Llazo

    What reeky is trying to say is that Argentina will set a new record for frequency and depth of default on its sovereign debt and will remain in recession for the next two decades while the country again assumes its international pariah status.

    Apr 06th, 2020 - 12:15 am - Link - Report abuse +1
  • Enrique Massot

    ML

    Marti remains hopelessly fixated in the past and is slow to realize the world's new paradigm. Pariah? Oh please, don't make me laugh that I'll fall from my chair, Marti!

    Apr 06th, 2020 - 01:01 am - Link - Report abuse -1
  • Marti Llazo

    Always someone who doesn't get the word on how poorly Argentina is falling behind in the world. Always some argie thinking that monumental failure is the “world's new paradigm.” And those of us who actually live in Argentina can see this failure up close, in terms of health care failure, in terms of lack of competitive industries, in terms of failed economy, in terms of massive corruption, in terms of expansive crime, in terms of growing poverty (now well over 45 percent of the population, for which reeky should be quite proud), and of course, Argentina's famous inability to pay its bills.

    Let's say this again slowly so that reeky can understand: Argentina is in its worst straits since its world-record default of January 2002. And it continues now with its same old paradigm.

    Apr 06th, 2020 - 05:23 pm - Link - Report abuse +1
  • Jo Bloggs

    Marti

    How is life in Argentina on a daily basis during this time of the Covid 19 crisis? Are people generally taking the advice regarding the need to social distance/ isolate? Are shops keeping their stock? Are banks open and able to dispense cash? I would imagine there would be a rush on both.

    Where do you live?

    Apr 06th, 2020 - 05:49 pm - Link - Report abuse 0
  • Pugol-H

    Enrique
    Argentina only worries me in so far as I have friends living there, I’m worried about how the UK is going to pay for all this, never mind Argentina.

    “The country's recuperation will set up a textbook case”.

    Where to begin, must have gooood shit where you are, somewhat optimistic don’t you think?

    Given what you are suggesting has never been done anywhere, never mind Argentina. Which you must admit, isn’t well known for economic recuperations, in fact they are as common as rocking horse shit, in Argentina.

    As for your resources, with far less economic activity and even less work to go around after this, an even larger part of your population will be surviving as best they can, unlikely to be paying much tax though. In fact costing a lot in payments, healthcare etc. etc.

    I don’t know about soya beans but have you seen the price of oil lately? Shale oil/gas is not worth extracting in the first place, before you add the cost of having to store it when it goes nowhere.

    Protecting Argentina’s population and economy during this and then re-starting Argentina’s economy afterwards will cost a lot of money, much, much more money than Argentina has or will have at its disposal anytime in the foreseeable future.

    Short of suddenly finding huge deposits of Iridium, gold, Rhodium and half a dozen of the most expensive rare earths, in say Argentinian occupied Patagonia, Argentina will have to borrow or starve.

    Not easy to borrow when you are in the process of defaulting.

    Unless of course the Unicorns give you a magic solution.

    Apr 06th, 2020 - 06:15 pm - Link - Report abuse 0
  • Marti Llazo

    Answer to Jo Bloggs

    I have businesses and residences in both Chile and Argentina. The latter is in Río Gallegos in Santa Cruz province. Rio Gallegos locked down fairly rigidly for the national mandatory stay-home/stay closed quarantine and there was some serious price-gouging in some parts of the country for food and basic “canasta” items. Argentina had closed the country including the frontier with Chile and was only allowing permanent residents to return. Because the Argentine government is famous for expropriating people's resources when things get rough, we have been moving assets into Chile. There were initially quite long queues for food in Río Gallegos shops and rather than deal with the expected full lockdown there I accepted an invitation stay with chileno friends where there were virtually no shortages on the shelves, hardly any shop queues, and no enforced quarantine, in spite of the martial law and troops controlling things. There are more COVID cases in Chile but proportionately fewer deaths. On contrast, Argentina has had proportionately a quite high virus death rate (deaths per 100 infected persons). Its health system is rather nowhere near what the boosters like to portray while Chile has mostly privatised health care. As of yesterday there were about 1500 reported cases and 48 dead in Argentina. Chile shows about 4800 cases and 37 deaths.

    Apr 06th, 2020 - 06:45 pm - Link - Report abuse 0
  • Pugol-H

    Reported cases and actual cases (what you need to work out the death rate) are proving to be very different things wherever you look, not least because in places 30%+ of the population never show any symptoms.

    The grim reality is watch the rate of increase in the deaths per day, when this levels out then reduces is when you are passing the peak, which is not the end of course.

    We will probably only know what the actual cases are/were when they get a reliable antibody test.

    Apr 06th, 2020 - 08:41 pm - Link - Report abuse 0
  • imoyaro

    And lest any of the usual suspects attempt to portray the current government as being fiscally responsible in any way, there's this...

    https://www.ambito.com/politica/casa-rosada/publicaron-el-nuevo-organigrama-del-estado-21-ministerios-84-secretarias-y-169-subsecretarias-n5072421

    “They published the new state organization chart with 21 ministries, 84 secretariats and 169 undersecretaries
    Politics
    December 20, 2019
    President Alberto Fernández approved the new organization chart for the National Public Administration. Does not include extra-scalar charges. The appointment of hundreds of secretaries and undersecretaries is now enabled. ”

    El ”ñoquismo”, at its best! Note that Ambito is a K controlled media outlet...

    Apr 07th, 2020 - 03:12 am - Link - Report abuse 0
  • Jo Bloggs

    Marti

    Thanks, that's interesting. Stay safe and I hope your businesses survive this.

    Apr 07th, 2020 - 12:28 pm - Link - Report abuse 0
  • Marti Llazo

    Jo B: Thanks -- Just got a proposal yesterday from the Chilean government for a good bit of work, so it looks like I will be in business for some time to come. slds.

    Apr 07th, 2020 - 03:10 pm - Link - Report abuse 0
  • Enrique Massot

    Pugol-H

    “I’m worried about how the UK is going to pay for all this, never mind Argentina.”

    You are right. The situation is worrisome -- the only difference is that, amazingly, two months ago Argentina was pretty much alone in its predicament and now it finds itself with lots of company, unfortunately.

    It would be good if this crisis taught us something about the value of the state as societal organizer as well as the brutal failure of the dominant model of the last four decades.

    My hopes that Argentina will do well going forward is based on its people -- it kicked out a notoriously bad government after one single term in office and elected Alberto Fernandez, who has had a promissory three months in office.

    For starters, Fernandez took the country in a near-default situation (which has been deeply analyzed by our ineffable M Llazo) and had now the coronavirus crisis to deal with. It's now clear that most countries buying Argentine products will reduce their purchases in the near future.

    Objectively, the situation could not be worse. Subjectively, the situation is much better than it was four years ago, when an inept president took office and began breaking the domestic sector while borrowing money abroad like a drunken sailor.

    What gives me hope, however, it's that the country is now pretty much on board with Fernandez' plans. The population's support combined with the government's will to kick-start the economy from the bottom up and based on the country's own resources could make all the difference.

    Good thing this forum acts like a sort of archive -- and we'll be able to talk again as time goes by.

    Apr 08th, 2020 - 04:16 am - Link - Report abuse 0
  • Marti Llazo

    Let's help reeky with those rose-coloured lenses.

    Argentina is in default. The depth and breadth of the default condition have been increased under the present Fernández government. The Fernández government has every intent to increase the extent of the default condition in coming months. The eventual default may set world records. Argentina previously set a world record for default . It may try to beat its own record.

    In the past few months the Fernández government has increased deficit spending -- spending money it doesn't have and can't borrow -- to a greater extent than at any time in recent history. Much of this spending in on politically inspired nonproductive activity.

    Argentine industry, with precious few exceptions, is chronically non-competitive in world markets and the ugly stain of Peronism has ensured that this will be the condition in the country for a long time to come.

    Poverty in the country has increased under the Fernández government and is expected to be close to 50 percent of the population soon. If not already.

    Argentina's Peronist hostility toward foreign investment and antagonistic default attitudes have virtually assured that the country won't be getting anything but a bit of charity from outside, resulting in strangulation of many needed imports and a return to absurd levels of protectionism, with only poorly made national-brand products available in the country on a par with cheap Walmart-grade plastic.

    The present recession in Argentina can only worsen under this peronismo, and the country will be assured of impoverished third-world status for at least the next decade.

    And those are just the positive aspects.

    Apr 08th, 2020 - 02:48 pm - Link - Report abuse +1
  • Pugol-H

    Enrique
    I hope your predictions for Argentina are right, for your sake and for the sake of my friends in Argentina.

    You are right that Argentina has a lot of company now, whether this is a help or hindrance I suppose is yet to be seen. A good time to be in the money lending business, if you have that kind of money.

    Default is not the same today as it was for the CFK administration, contracts have built in clauses for haircuts if a sufficient % of debtors agree. With limited resale options, no buying up debt for cents in the dollar then demanding full repayment.

    So your current administration has a point, debtors including the world bank are going to have to negotiate about this, at least try and salvage what they can, in terms of getting some money back.

    But, if you do have to go back to the money markets, basically defaulting already, when everyone else is trying to borrow money, not defaulting!!!!

    At some point the Argentinian economy, business and manufacturing has to become competitive on a global scale, protectionism prevents this. Or you export raw materials, these are the only two ways to make money to pay for social programs.

    Let us hope it goes the way you think it will.

    As you say, we will talk as time goes by.

    Apr 08th, 2020 - 11:41 pm - Link - Report abuse +1

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!