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ARGENTINA | 31-10-2019 09:56

US tells Fernández it expects him to 'uphold commitments' in IMF deal

US Treasury Secretary Steven Mnuchin tells incoming government that Washington expects Argentina to uphold its commitments laid out in IMF loan package.

The United States expects President-elect Alberto Fernández to "uphold" the commitments laid out under the terms Argentina's record US$57-billion credit-line with the International Monetary Fund (IMF), a senior official said Wednesday.

In the first comments by a senior US official on the IMF deal since Fernández's election, US Treasury Secretary Steven Mnuchin, speaking to Reuters, did not rule out a potential renegotiation of the loan but said that any request to change the terms of the deal would be considered alongside Argentina's wider economic approach.

“They have a commitment to the IMF," Mnuchin, who visited Buenos Aires for the G20 Leaders Summit last year, said.

"Our expectation is that this government upholds that commitment and if they ask for changes, like any other country, the IMF will look at their request as part of what their economic plan is,” Mnuchin told Reuters, speaking in Riyadh.

“We want to see the people of Argentina, and the economy, succeed. Our interests are to support the people,” Mnuchin told Reuters.

As the largest shareholder in the International Monetary Fund, the US will be key to unlocking negotiations between the new government and the Washington-based organisation over Argentina’s US$56-billion funding programme, which is currently on hold. While the IMF board will wait to see the details of Fernández’s economic plan, Washington does have some sway over its members, holding 16.5 percent of the board's voting power. 

Peronist leader Fernández said repeatedly during his campaign that he would renegotiate the IMF programme, regularly attacking the Fund and the Mauricio Mari administration's move to seek credit on the campaign trail. He has indicated he would like to reschedule payments.

Mnuchin is the second high-level official to reference the Frente de Todos leader's election in recent days. Secretary of State Michael Pompeo congratulated Fernández on his election win, but US President Donald Trump has yet to comment.

Pompeo, in a statement issued on Monday after the election, congratulated Fernández for his victory and said he was looking forward to working with the new government.

"We congratulate the people of Argentina for holding successful presidential elections on October 27 and we are ready to work with Alberto Fernández as the new president of Argentina," Pompeo said.  

"We look forward to working with the Fernández government to promote regional security, prosperity and the rule of law," the US State Department said in a statement on Monday.

For the US, Fernández’s victory represents a risk for the White House after the close alliance – both personal and transactional – between Macri and Trump.

Fears have grown in Washington that Argentina's likely shift toward embracing leftist allies in the region – potentially even toward Venezuela and Cuba – would see them lose a key ally in the country.

In that sense, the US has an incentive to reach out to Fernández and work with the more pragmatic elements of his government. Washington is also seeking to curb China’s influence in the region.



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