Argentina escapes the vise of Macri's external debt.

The government of Alberto Fernandez and Cristina Kirchner announces a positive advance in the crucial and long-awaited negotiation of the external debt, thanks to the strategic planning of their young Minister of Economy, Martin Guzmán. The exorbitant external debt contracted by Macri and his neoliberal Wall Street ministers and financial advisors (Prat Gay, Luis Caputo, Nicolas Dujovne), reaching 97,7% of Argentina's GDP, is the minefield upon which the COVID-19 pandemic was planted. It is in this context, of empty state coffers, war, and double ruin (economic and health-related), that the government of Front of All He began his epic journey, which started just 8 months ago.
After months of meetings and debates, since the beginning of the administration, an initial agreement was finally reached with the most inflexible international financial creditors on Wall Street, among whom the predominant group is... Black Rock, the largest asset manager in the Western world. After much resistance from bondholders, the debt restructuring reached the sustainability target expressed in the statement accompanying Alberto-Guzmán's latest offer in early July: "Argentina fully intends to reach a sustainable agreement that does not subject its people to further suffering and anguish.Based on these premises, the Argentine government declared that the proposal of July 6th is the Republic's final offer to its creditors and represents the maximum and ultimate effort the country can sustain. With this conviction, our country encourages the creditor community to accept it, knowing that otherwise, any future negotiations will be more complex because Argentina's situation will be more difficult.

In this latest negotiated restructuring, the details of which are still being finalized until August 24th, Argentina managed to reduce interest payments on foreign bonds to 3,07 percent, compared to 7 percent under Macri's previous regime. The renegotiation involved replacing $100-denominated debt securities with $54-denominated ones, under foreign law. As a result, the government will save, or rather, avoid paying, $40 billion over the next 10 years. And once an agreement is reached with creditors under Argentine law, the government is expected to release approximately $57 billion over 5 years.  

A comparative image of what debt negotiation entails was given by the former Deputy Minister of Economy in Cristina Kirchner's government, Emmanuel Agis, who stated that what was achieved was reducing the weight of a 100 kg backpack to 50 kg on one's back. explanation The Argentine Center for Political Economy (CEPA) provides a summary of the topic. "If between 2020 and 2024 $63,6 billion was due in all terms (principal and interest, public and private debt, local and foreign law), we will only pay approximately $6.1 billion." In other words, of the $10 the country was obligated to pay as debt, it will only have to pay $1. The remaining $9 will be state funds to be used for economic recovery. Minister Guzmán reinforces this: "The State must play a central role. Argentina must be protected. What the previous government did cannot be repeated. Never again!" At the same time, it refers to some structural problems that need to be solved: "We don't want public debt in dollars. Dollarization is a deep problem in Argentina."

Negotiations with the IMF and the Paris Club are yet to be outlined. Martín Guzmán attributes the problems of the IMF during the Macri era to the IMF. "a great responsibility for what happened in Argentina" on "Loans that were part of a political maneuver." Nevertheless, there is some optimism surrounding the replacement of former IMF director Christine Lagarde (with whom Macri took on unpayable loans) by Bulgarian Kristalina Georgieva, which indicates a more flexible approach. Added to this is the fact that Pope Francis declared earlier in the year, in a meeting with Georgieva at the Vatican, in the presence of Argentine Minister Guzmán, regarding the debt with the IMF:  "One cannot expect payment through unbearable sacrifices." At Easter, he reinforced his call to the world for a moratorium on external debts: "This is not the time for selfishness." and asked that "The great needs of the moment must be addressed by all countries, reducing or even forgiving the debt that weighs on the budgets of the poorest." Another source of support for Alberto Fernandez's government was the leaders of the European Union, Spain, France, Germany, and Italy. Certainly, for several European creditors, in the context of the global capitalist economic debacle accelerated by the pandemic, it becomes convenient to concede in order not to lose everything.

Let us recall that of the $104 billion in loans taken out by Macri, $88 billion vanished; the dollars entered the cycle of financial speculation, with very high interest rates, amidst an accelerated currency run, and went abroad without entering into productive and national industrial investment. Read.

However, the issue of external debt repayment is generating friction even within progressive forces. Certainly, this renegotiation achieved by the government, as an emergency measure in response to the economic hardships of the Argentine people, is neither entirely fair nor sufficient. Economic policy experts could offer a precise opinion on this. But it is evident that it is fundamental to have achieved this relief and to be able to allocate a good portion of what is recovered from debt repayment obligations to solve the pressing economic problems exacerbated by the pandemic. In fact, Alberto Fernández, after announcing the victorious results of the debt negotiation, launched several projects in a national radio and television broadcast (as befits a serious statesman): from construction and home renovation loans (which will generate 128 direct and 84 indirect jobs) to reactivating the housing plan. Procreate Created by the government of Cristina Kirchner), simultaneously with a National Urban Land Plan (remodeling of cities, which likely includes the issue of "slums"); the completion of roads and public works (interrupted during the Macri era), and a plan to restructure prisons (reduced to collective "tombs") for humanitarian purposes, social rehabilitation, and reintegration into the workforce. All projects imply economic reactivation and job creation. Furthermore, he cited goals to prevent the country from incurring new dependencies, guaranteeing financial sovereignty in the interest of society: reducing the fiscal deficit, increasing the trade balance, the inflow of dollars from exports, productive development and the domestic market, and seeking to ensure a competitive dollar. 

At the same time, the question arises as to what policy and mechanism will make it possible to recover the money that was borrowed, indebted the country, did not produce goods, and fled to tax havens. 

Sectors of the far left question the repayment of the debt to creditors within the concept of social justice and, therefore, demand a total moratorium and that those who contracted and evaded the debt pay, that is, the promoters of the political and economic fiasco. However, nothing indicates that there is a correlation of political forces to impose this solution in this emergency, considering the set of structural projects of the nation and popular sovereignty that have been undermined in the last 4 years. Perhaps in the short term, the economic and political strength of China and Russia will have a weight that will allow a definitive break with the dependence of Latin American economies on the financial power of the US and global finance. The debt negotiation was achieved amidst a huge economic and media war by the opposition, with fascist anti-quarantine campaigns, anti-judicial reform with judges in the Supreme Court complicit in the... lawfare, who have not yet been defeated. Certainly, as the Judicial Reform If justice prevails, and advances against the impunity of tycoons who evade taxes with large fortunes sent to tax havens, the economic flow of [the government/organization] will grow. collection of external debtCongressman Itai Hagman delivered a powerful speech, praised by Vice President Cristina Kirchner. He explained that the country's problem is not only its external debt, but also its structure and overall model. "It's important that we acknowledge this, because if we don't have an accurate diagnosis of the nature of the economic crisis, we risk believing that when the pandemic passes, the economy will reactivate and we will recover to previous levels, but pre-pandemic Argentina explains the severity of this crisis." We don't want to go back to pre-pandemic Argentina.. Elsewhere he said: “I am not happy that we have to pay an external debt irresponsibly incurred to finance capital flight, but we made a commitment to the Argentine people to resolve this problem. What we need to do is reflect, understand why this happened. Why is this debt crisis happening? Veja. 

The pandemic has highlighted enormous economic and social needs and has placed urgent solutions on the agenda in several fields. The Argentine Congress is called upon to unite efforts to support the projects of Alberto and Cristina's government in the short term. The opposition seeks to deny the successful functioning of Parliament in virtual mode (due to the pandemic), with the purpose of blocking all the new progressive laws underway: the judicial reform and the emergency tax on large fortunes (already approved by more than 70% of public opinion). The campaign of the hegemonic opposition media, orchestrated by the groups Clarin e La Nación It is atrocious and destabilizing. Front of All It leads to a fierce battle through young and combative figures of Peronism-Kirchnerism against the opposition forces of Cambiemos-PRO. The deputy Maxim Kirchner, he embodied this spirit in an exemplary manner, as head of the parliamentary group of Front of AllIt's worth listening to.