MercoPress. South Atlantic News Agency

IMF concerned over future of Argentine deal due to political turmoil

An agreement with the Fund is not something to celebrate, Chodos acknowledged

Argentina's representative to the International Monetary Fund (IMF) Sergio Chodos Wednesday said in a radio interview the multinational body was concerned after Deputy Máximo Kirchner's resignation as majority leader, which might jeopardize the Congressional approval of the preliminary understanding reached last week.

Chodos said the IMF was closely following the political crisis and considered the approval of Congress to be “essential” agreement to move forward. Last week, the Argentine Government announced an arrangement had been reached with the IMF and as a result of those negotiations maturities in excess of US $ 700 million were paid. However, no formal document has been signed for the time being.

Lower House Speaker Sergio Massa Tuesday explained a memorandum of understanding needed to be reached first with the IMF, after which Congress' approval would be required.

Chodos also pointed out the IMF worries had to do with President Alberto Fernández's decision to put up the final document for Congressional approval after a “tradition of more than 22 programs that were discussed and decided behind society's back.”

The Argentine economist also said the final text needed to be approved by the IMF's Board of Directors.

Regarding Máximo Kirchner's decision, Chodos believed the IMF now needed to monitor how things unfolded locally. He also called on the opposition to be supportive: ”Having been responsible for the largest loan in the Fund's history with Argentina,“ the opposition now needed to show some ”social responsibility,” Chodos stressed.

He also explained that the quarterly reviews that the Fund will focus on indexes such as fiscal deficit, monetary emission and Central Bank reserves. There will be 10 IMF quarterly reviews of the economic program.

“The revisions are obviously unpleasant because having been involved in the Fund is a tragedy,“ Chodos said. ”Nobody likes to have this process of quarterly revisions,“ he added.

“It doesn't seem to me that an agreement with the Fund is something to celebrate,” he admitted. ”It would be wonderful if Argentina did not have this exposure, but it happened.”