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ECONOMY | 03-12-2021 02:49

Guzmán tells CGT he won’t sign ‘austerity agreement’ with IMF

Economy Minister Martín Guzmán promises that "there will be no austerity" in Argentina and that his economic plan seeks to "create jobs and lower inflation."

The CGT umbrella labour grouping has offered its support for the government’s negotiations with the International Monetary Fund (IMF) after Economy Minister Martín Guzmán promised that "there will be no austerity" and that his economic plan seeks to "create jobs and lower inflation."

A rare case of an Economy Minister visiting the CGT, Guzmán told the trade unionists: "This is not a problem which can be resolved in one single step because it is too big," also criticising the negotiating strategy of the previous government led by former president Mauricio Macri.

"Our government will not sign any austerity agreement because that would mean preventing economic recovery from being given any continuity," Guzmán told the troika now heading the CGT, composed of secretaries-general Héctor Daer (health workers), Pablo Moyano (teamsters) and Carlos Acuña (service station employees).

"True social inclusion comes from creating decent jobs and generating hope and opportunity," Guzmán also affirmed.

A technical mission team with officials from Argentina's Economy Ministry and Central Bank will travel to Washington on Saturday to meet with IMF representatives and continue negotiations. 

Argentina is seeking to replace the three-year stand-by agreement for US$57 billion granted in 2018, of which US$44 billion has been disbursed. After taking office in December 2019, President Alberto Fernández refused to accept the rest of the loan.

The current agreement obliges the repayment of maturities in 2022 and 2023 worth more than US$19billion each year, with another US$5 billion due in 2024.

"We are working towards an agreement which permits us to continue along the path we want, which is for everything to become more ordered," Guzmán told the trade union top brass of Moyano, Daer, Acuña, Gerardo Martínez (Uocra building workers), Antonio Caló (UOM metal workers), Andrés Rodríguez (UPCN civil servants), José Luis Lingieri (Obras Sanitarias waterworks employees) and Julio Piumato (court clerks) with Labour Minister Claudio Moroni also in attendance.

Guzmán confirmed to the trade unionists that if an agreement can be reached with the IMF, Argentina would only start paying the debt in 2026 since it is negotiating for a grace period of five years.

"What we are seeking is an agreement for sustainable development with a programme spanning several years, in which we tell the IMF what I’m going to do so that Argentina recovers, jobs are created and inflation comes down," maintained the minister.

The government announced that a technical mission will be heading out to Washington "to continue advancing towards a technical understanding in the framework of the negotiations with that multilateral credit organism for a programme which permits refinancing the loan taken in 2018." Following this information, added to the confirmation that US$1.8 billion will be paid to the IMF on the December 18 deadline, the government seeks to transmit the idea that the negotiations are up and running.

Guzmán has maintained in various recent interviews that his idea is to reach an agreement before next March. 

 

Manzur: We want to pay

Cabinet Chief Juan Manzur, speaking at the closure of the 27th Industrial Conference of the Argentine Industrial Union (UIA), along with the business community, in Parque Norte this week said that he had no doubt that "we are going to reach an agreement and that it’s going to be the best possible agreement for the Argentine people."

Furthermore, he recognised that there are "difficulties" but said that his government is "absolutely convinced of the country’s potential."

The Tucumán governor on leave highlighted that "businessmen have been up to the circumstances," adding: "This is the recognition we in government want to make."

"We want to pay, the only condition we request is that they let us grow," affirmed Manzur, when addressing the industrialists of the UIA.

The official said: "The debt was irresponsible but it’s there and no use crying over spilt milk. You’ve got to solve it and that’s what we’re going to do. We’re going to put all our efforts into this, we want to resolve this problem and we want to pay – Argentina wants to pay. We only ask for one condition, that they let us grow in order to be able to pay."

After the results of the midterm elections, President Fernández assured that the government was beginning to work on a Programa Plurianual spanning several years, that it would be delivered to Congress early this month and that the opposition would also be consulted to arrive at a document satisfying all parties.

Next week Guzmán will be defending the 2022 Budget in Congress. As recently made known, the objetive of the government is for the bill containing the main lines for an agreement with the IMF to be ready to send by December 17. 

 

Key quotes from Martín Guzmán’s presentation to the CGT:

  • " Our government will not sign any austerity agreement because that would mean preventing economic recovery from being given any continuity. We are working towards an agreement which permits us to continue along the path we want, which is for everything to become more ordered."

  • "That debt [with the IMF] is too big to meet the 2022 and 2023 payments programmed according to the stand-by loan and anything destined towards that end means less capacity for the Argentine economy."

  • "We are negotiating in order to be able to have public policies which are ours, permitting Argentina to continue along the path of calming the economy and when we’re better-off, we’ll be able to meet our debt with the IMF."

  • " This is not a problem which can be resolved in one single step because it is too big. If we arrive at an agreement soon, that would mean only beginning to pay the IMF in 2026."

  • "What we are seeking is an agreement for sustainable development with a programme spanning several years, in which we tell the IMF: ‘I’m presenting this and this is what I’m going to do so that Argentina recovers, jobs are created and inflation comes down, which is something fundamental so that the economy functions well and adds value. Allow me to reschedule so that I don’t have to pay you now.’"

 

– TIMES/AFP/NA

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