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They were hours of cold sweat for Martín Guzmán. The eve of millionaire payments with money that Argentina did not have pushed to the limit the risky strategy that it had begun to deploy in December 2019 against the advice of local advisers, bankers and the US Treasury Department itself.

The debt negotiation left fingerprints on the minister’s passport of Economy. His first trip to the United States for that subject departed on January 24, 2020 and returned five days later. The passage it cost $2,660, a negligible number for everything that was at stake, but more expensive than that of Paul Salinas, his adviser, who accompanied him on the same dates. That seat was $1,020 less. It is likely that you have traveled less comfortably than your boss.

The agreement announced yesterday, which in practice is not yet such, is perhaps the piece of best workmanship elaborated by the Fernández-Guzmán tandem for their own political needs. The big loser, at least in this preamble of good intentions regarding what is to come, is Cristina Kirchner.

Martín Guzmán released a photo in which he is seen working hours before announcing a principle agreement with the IMF.
Martín Guzmán released a photo in which he is seen working hours before announcing a principle agreement with the IMF.

The vice president had marked the lines of the negotiation with thick lines. Among other things, he demanded for Argentina the possibility of paying over 20 years, that the so-called surcharges (interest above the usual rate) be forgiven and avoid any type of conditioning for the future. none of that will happen.

Alberto Fernandez hid under the banner of growth the implementation of a light stabilization program with orthodox orientation that is at the antipodes of the red book of Cristina Kirchner and Axel Kicillof. It is warned by basic elements: reduction of the fiscal deficit, positive interest rates and less monetary emission of the Central Bank to attend to the problems of the Treasury. He also hid another milestone: the zero deficit will not arrive in 2027, as Guzmán wanted, but two years before. It was fulfilled wish of the fund.

There are Other annoyances for Cristina Kirchner. You will have to endure that every three months an IMF technical mission comes to the country to audit your government’s numbers and tell you what is right, what is wrong and how to proceed.

In the past, Nestor Kirchner decided to cancel in a single payment Argentina’s debt with the agency to avoid the visits from washington. It happened on January 3, 2006 and it was an expensive taste, given that the debt with the Fund paid low interest and the decision defunded the Central Bank, which obtained a letter from the State in exchange for US$9,810 million.

Guzmán and Fernández take, in any case, others awards. His administration will not have to make payments to the Fund, which would resume in 2026. Thus, the weight of the debt with the IMF on the future of Argentina will be a difficulty faced by the next government, which could be in the hands of the opposition. The karmic circularity of the macrismo in the relationship with the Fund is surprising.

There is part of the response to the rhetoric of the President, who asked himself yesterday morning “who created a problem and who solved it.” It is highly unlikely that history credits the front of all the last part of the previous sentence.

Juan Manzur, Alberto Fernández and Sergio Massa leaving Casa Rosada the day before the announcement.
Juan Manzur, Alberto Fernández and Sergio Massa leaving Casa Rosada the day before the announcement.Santiago Filipuzzi

The tandem never thought that not agreeing with the IMF would be a real possibility. On that enlarged table is also Sergio Massa, minority founder of the Front of All and one of the spokesmen of the Casa Rosada with the United States, as well as a second line full of lower-ranking officials.

More than the fear of falling into default, they were motivated by the possibility of change the expectations generated by a government that is floundering Almost from day one. It is the silver bullet of the Casa Rosada: without its own attributes capable of improving confidence in the country, an agreement with the IMF may suggest that Argentina would redirect itself towards a path of imported normalcy.

Cristina Kirchner’s soldiers were the enemies of the previous plan, led by their captain. Some of them, like Leopoldo Moreau and the precognitive Fernanda Vallejos, spread their doubts regarding the advisability of advancing along the line of dialogue. To that list we must add the name of a covered, Carlos Zanini.

Zanini was the man designated by Cristina Kirchner to accompany the list to Daniel Scioli in the elections that won them Mauricio. In the efforts of the Kirchner couple, he was in charge of the Legal and Technical Secretariat, from where some of the great creations of recent decades emerged, such as the nationalization of YPF, for which Argentina still faces a million-dollar lawsuit in the second circuit of Nueva York.

Today he directs the Treasury Attorney. Bankers who dialogue with the Ministry of Economy and with the Central Bank attribute to him a new line of thought that Fernández rejected. According heard this week on city, consisted of not moving towards a new agreement with the IMF that applies conditions, but without stopping paying to avoid a default. They are resources that Argentina does not have. The exploratory intention was to get friendly nations to lend DEGS (the IMF’s currency) so that Argentina could partially cancel its payments.

The underlying idea questioned the advisability of doing something now that goes against the electoral interests that the Casa Rosada will have to defend in two years. It is the same logic that convinced Cristina Kirchner when months before the end of her second presidential term, at the suggestion of July De Vido, rejected his Economy Minister, Axel Kicillof, the possibility of implementing a tariff increase before the change of command. Guzmán’s announcement cancels those expeditions.

The path announced by the Government proposes to arrive in 2023 in Argentina that he inherited in 2019 from the hands of Mauricio Macri, with some additional complications. Perhaps there lies a key point and hitherto unknown. Given that the agreement with the IMF must go through Congress, it is not clear that the opposition will approve postponing issues that Together for Change will later have to face in the event that an electoral result similar to that of last November is repeated in two years.


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