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I'm often asked whether the Biden administration will support the renegotiation of Argentina's $44 billion @IMFNews debt, and perhaps even secure its government additional funds. Biden will want to help, but the biggest obstacle is in Buenos Aires, not in the U.S. Treasury. 1/8
This was clear before Alberto Fernández's inauguration in December. In October 2019, I hosted his ally, Lower House Speaker Sergio Massa, who criticized the Fund for "punishing" countries amid economic crises and dissed labor and pension reforms the IMF urged for Argentina. 2/8
In February of this year, the vice president, Cristina Fernández de Kirchner, on a trip to Cuba of all places, dumped on the IMF's 2018 Argentina bailout and insisted the country deserved a "quita sustancial" on its Fund debt. 3/8
Now, beset by high inflation, a looming currency crisis and a 12% GDP collapse (its 3rd consecutive year of negative growth), Argentina's Peronist government is again turning to the Fund for help, asking for an extended fund facility to delay repayment for at least 4 years. 4/8
But while the finance minister has his hat in hand, elements of the fractious coalition are rebelling. Moreover, it's not clear the president himself has the willingness or political capital to tackle the deficit and carry out structural reform. 5/8 https://twitter.com/benjamingedan/status/1326643771006705664?s=20
The production minister, Matías Kulfas, has already warned, "no hay margen para el ajuste." 6/8 https://eleconomista.com.ar/2020-11-kulfas-fmi/
Worse, the vice president's senate allies published an anti-IMF cris de coeur (footnoting my @FT interview!) that said @KGeorgieva should share the blame for Argentina's "rápido, desproporcionado e inútil endeudamiento" with the Fund. 7/8
"Es larga y fracasada la historia de los acuerdos de la Argentina con el FMI," the senators say. Sad but true. But it's hard to see success in the next chapter of this relationship if the borrower sees its creditor as a "vehículo de políticas" that promise "pobreza y dolor." 8/8
