The Mauricio Macri government is today nervously awaiting two decisions with the potential to impact Argentina's economy.
The International Monetary Fund (IMF) will review Argentina’s arguments for the approval of the first part of a stand-by loan of US$ 50 billion, while Morgan Stanley Capital International (MSCI) will determine if the country is promoted from a frontier to emerging market.
Christine Lagarde’s IMF is meeting today in Washington to assess Argentina’s arguments for the US$50 billion loan agreed to last month. If approved, the IMF could release an initial US$15 billion, half of which the government says will be used to support the budget.
The deal has sparked controversy in Argentina because of the country’s history with the IMF.
TENSION IN CONGRESS
Opposition parties in Congress are trying to force a vote on the deal, a manoeuvre which is expected to fail given unofficial agreements between the Macri government and provincial governors yielding significant influence over lawmakers from their respective provinces.
“In my opinion, it requires no approval from Congress given article 60 of the Financial Administration Law that foresees that deals with multilateral organisations with which Argentina is an associate do not request prior consent from Congress”, said Mario Negri, a lawmaker in Macri’s ruling Cambiemos (Let’s Change) coalition.
For his part, leading opposition figure Agustín Rossi said: “It is not a line of financing in which the IMF gives the government a loan and the only thing it does is set interest rates, repayment periods and the amount.
“Here we have a significant amount of conditions that are set out in Argentina’s intention letter that have the same weight as everything else, meaning it is not a normal loan”, he told Perfil.
-TIMES/PERFIL
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