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Montevideo, May 23rd 2024 - 09:21 UTC



FMI hopes Milei's plan gets enough political support

Friday, January 12th 2024 - 13:33 UTC
Full article 29 comments
President Javier Milei's administration “is already implementing an ambitious stabilization plan,” Kozack also noted President Javier Milei's administration “is already implementing an ambitious stabilization plan,” Kozack also noted

International Monetary Fund (IMF) Spokeswoman Julie Kozack Thursday said the global credit agency hoped Argentina's latest measures would have the political support they needed, particularly the adjustments included in the so-called Omnibus Law bill currently in Congress.

Argentina reached a verbal agreement with the IMF earlier this week which consisted of rekindling the written one from the previous administration of President Alberto Fernández and Economy Minister Sergio Massa which had been technically defaulted for not meeting the fiscal deficit caps.

“There are aspects of this bill that have important fiscal implications and, as such, we expect the authorities to continue to build political support to advance key aspects of this bill,” Kozack said, presumably also with President Javier Milei's emergency Decree (DNU) 70/2023 in mind. The measure's final approval is now up to both a Bicameral Congress Commission or the courts. In the meantime as so long as it is not repealed, it is deemed valid in its entirety.

The IMF announced Wednesday that an understanding had been “reached on a set of economic policies that can restore macroeconomic stability in Argentina and put the current program back on track.” It also pointed out that the Argentine Government “moved towards a more market-friendly regime and abandoned the previous policy of intervening in the parallel dollar and futures market in the process of lifting exchange restrictions.”

With this promise, the technical staff led by the Venezuelan Luis Cubeddu returned to Washington to submit its report to the IMF Board of Directors. If the Board approves it, financial assistance to Argentina will be resumed with an immediate disbursement of some US$ 4.7 billion to be applied to impending capital maturities with the organization.

In return, the Government pledged to achieve a primary fiscal surplus of 2% of the country's GDP; net reserves worth US$ 10 billion and to shut down all monetary issuing this year.

The IMF warnings seek to raise awareness among lawmakers of the consequences of not endorsing Milei's reforms. Economy Minister Luis Toto Caputo had already said that if the measures are not upheld, more drastic measures would need to be taken, which would be hard on all Argentines.

In this scenario, Kozack hoped the Argentine authorities would “continue building political consensus so that the key points of this regulation are approved.” Regarding social policies, she explained that the package agreed upon “includes an increase in social assistance to protect the most vulnerable in the Argentine economy.”

“The authorities are committed to ending Central Bank financing to the government while strengthening the institution's balance sheet,” she also underlined.

Top Comments

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  • Pugol-H

    For me, the jury is still out on Javier Milei, in time we shall see how effective he is in tackling Argentina’s considerable problems. Frankly he’s a brave man for trying and I wish him well in that endeavour.

    At least he seems to have a plan and isn’t just doing more of the same as is the wont of the Peronists, no matter how many time or how badly such policies failed. Einstein defined madness as doing the same thing over and over again and expecting a different result.

    To be honest, Trump worries me, when he found out Sterilizer/Bleach killed covid he thought injecting people with it might be a cure.

    It would certainly kill the covid and unfortunately the patient as well.

    We have to agree to disagree on that one. Although another Trump/Biden contest would once again be the evil of two lesser. They desperately need a third option, if that’s possible under their system.

    As I just explained to Braz on another thread ‘Chinese money for loans, currency swaps and the belt and road initiative, is rapidly drying up as China faces a looming property market crisis, amongst other things.

    And all this before the Taiwan election result.

    The global south is going to have to get their expensive loans and commodity markets somewhere else for the foreseeable.’

    You were wise to focus on western markets, where quality is required and you’re payed in hard currency.

    Pleased to hear you and your Clan are still living the dolce vita, buen provecho Compadre. Multilingual or what!

    Tonight its Jamaican Oxtail stew with rice and peas (Gungo peas), steamed veg and a fried dumpling, all washed down with Red Strip larger, a feast for me.

    Saludos de Colonia Nervia Glevensium.

    Jan 13th, 2024 - 04:16 pm +1
  • Terence Hill

    “What links Rishi Sunak, Javier Milei and Donald Trump? The shadowy network behind their policies. George Monbiot

    The Atlas Network’s dark-money junktanks are behind neoliberal policies around the world.
    A crash programme of massive cuts; demolishing public services; privatising public assets; centralising political power; sacking civil servants; sweeping away constraints on corporations and oligarchs; destroying regulations that protect workers, vulnerable people and the living world; supporting landlords against tenants; criminalising peaceful protest; restricting the right to strike.

    the Atlas Network, a global coordinating body that promotes broadly the same political and economic package everywhere it operates”

    Jan 12th, 2024 - 01:49 pm 0
  • Pugol-H

    And a puff of smoke from behind a grassy knoll.

    Jan 12th, 2024 - 02:27 pm 0
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