MercoPress. South Atlantic News Agency

Argentina close to new deal with Paris Club

Massa is scheduled to travel to France later this month

Economy Minister Sergio Massa Thursday announced he was close to reaching an agreement with the Paris Club for the repayment of Argentina's debt due by May 2020, which was affected by the COVID-19 crisis.

Argentina last paid US$190 million, as part of the agreement reached in mid-2021, for which it had already made another disbursement of US$226 million in July, both on account of the principal of the total debt of US$2.4 billion that the country had to pay on July 31, 2021, as per a previous extension.

“There are very good prospects to close the agreement” with the conditions proposed by Argentina, Massa said in Washington DC after a meeting with Paris Club Secretary General Emmanuel Moulin, who is also France's Secretary of the Treasury.

“The agreement is almost closed,” Massa said according to Télam. Massa was reported to be planning a trip to France for October 27 and 28 for further negotiations, it was reported. Télam said the 9% annual interest rate currently paid by Argentina to the Club includes a penalty for late payments in recent years, which could be reduced when the agreement is signed later this month.

Joining Massa during the negotiations were Deputy Economy Minister Gabriel Rubinstein, National Institute of Statistics and Census Chief Marco Lavagna, Central Bank (BCRA) Director Lisandro Cleri, and Massa's Chief Advisor Leonardo Madcur.

Argentina passing the second review of the current program with the IMF was key to unlocking negotiations with the Paris Club. It was an unwritten basic condition to evaluate the performance and policies for the refinancing of Argentina's foreign debt after the resignation of Martin Guzman in early July thwarted the understanding.

The Paris Club is an informal group of creditors including many of the wealthiest countries in the world and which are also members of the International Monetary Fund's Board. Failure to comply with the commitments scheduled with this organization means defaulting. The 22 countries that currently make up the IMF represent approximately 60% of the world's GDP.