BUENOS AIRES: Recession-hit Argentina opens talks this week with a team from the International Monetary Fund, seeking relief from what President Alberto Fernandez says is an unsustainable foreign debt.
With the IMF delegation due to arrive in Buenos Aires on Wednesday (Feb 12) for a three-day visit, left-wing parties and organizations called for public protests and roadblocks to press demands for a suspension of debt payments.
The government hopes to renegotiate US$195 billion of the country's US$311 billion foreign debt – including a deeply unpopular US$44 billion bailout loan from the Washington-based IMF in 2018.
Fernandez insists Argentina cannot meet debt payments without economic growth, hampered by inflation of more than 50 per cent, as well as mounting poverty and joblessness.
"With the IMF meeting, we'll start to see what the government's economic plan is," economist Hector Rubini from Salvador University told AFP.
"The creditors need to know what chance Argentina has of paying its debt."
Economy Minister Martin Guzman is also due to present his fiscal plan to Congress on Wednesday.
"Despite its statements that it wants to pay (its debt), so far the government has lacked clarity around key political decisions," said the risk evaluation company Verisk Maplecroft.
Guzman has already met with the IMF, while Fernandez embarked on a European tour to drum up support for his proposals.
So far, the IMF and the Argentine government have both spoken positively about their exchanges.
"The IMF is showing a willingness because it wants to get paid and also in part because it contributed to this situation," said Rubini, referring to the original bailout loan agreed with former president Mauricio Macri for a record US$57 billion.
When assuming power two months ago, Fernandez refused the US$13 billion of outstanding disbursements, bringing the total to US$44 billion.
SPEED IS KEY
"We don't want money to go to the IMF, we want it to be designated for a serious plan to help the poorest sectors," said Monica Sulle, a left-wing activist taking part in a street protest.
Fernandez's government has until Mar 31 to reach an agreement with its creditors before it will almost certainly be unable to meet its repayment obligations.
Fernandez wants to avoid another devastating default like the one in 2001, when Argentina bailed on a US$100 billion debt.
"There's room to negotiate a win-win situation, but the problem is that there have been delays," said economist Marina Dal Poggetto, from consulting firm EcoGo. "The best agreement is the quickest one."
It is estimateRead More – Source