Buenos Aires Weather | IMF bill reaches Congress amid uncertainty

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After procrastination and following new amendments to the text, the government finally sent its draft agreement with the International Monetary Fund (IMF) to the Chamber of Deputies on Friday. Debate on the bill, which contains four articles, will begin on Monday, congressional sources confirmed.

After tracking the bill’s arrival the day before in local media, officials revealed that its arrival in the Legislative Assembly on Friday was further delayed by a standoff, with the opposition seeking to separate articles endorsing the bill. debt financing agreement has two annexes detailing economic measures to which the government has committed.

According to sources quoted by Noticias Argentinas, the opposition wanted to give its lawmakers the possibility of voting in favor of the agreement without approving the government’s economic plans, leaving the path of abstention open for these articles.

The text of the bill which finally entered the Chamber of Deputies just after noon has four articles, the first explicitly authorizing the executive to negotiate. The second includes annexes detailing economic plans and the third and fourth are “formal”, sources told NA.

Local media spent Friday reporting that lawmakers from the opposition coalition Juntos por el Cambio intended to wait to hear a presentation from Economy Minister Martín Guzmán on the deal before defining their position. on the agreement. To do otherwise would be “premature,” the lawmakers said.

“At Juntos por el Cambio we have always said that Congress is only allowed to vote on funding, economic programs are the power of the executive and Parliament has no reason to give its opinion or to approve,” said members of the opposition parliamentary group. Noticias Argentinas news agency.

Guzmán’s presentation is expected to take place on Wednesday. He will also meet lawmakers from the ruling coalition on Sunday in the capital to discuss the deal.

Doubts and tensions

The approach of the start of the legislative debate is already straining relations between the different factions of the ruling coalition. As Guzmán, President Alberto Fernández, and Lower House Speaker Sergio Massa struggle to build bridges with and win over the opposition, Kirchner’s hardline lawmakers in the Frente de Todos are hardening their stances, leaving the government in the dark as to the extent to which support it actually has among its own lawmakers.

On Thursday afternoon, hours after the government confirmed that it had reached an agreement with the Fund, the youth organization La Cámpora posted a fiercely critical video of the IMF on social media. Although it did not include any direct reference to the negotiations, the group – which is led by former Frente de Todos caucus leader Máximo Kirchner, who resigned from his post in opposition to the deal – warned that any agreement with the IMF would have painful consequences for the population and should be subject to periodic reviews by the multilateral lender.

Adding to the complications, a sector of Kirchnerite activists plan to demonstrate outside Congress next Wednesday (March 9) as the bill is debated to voice their rejection. A number of union leaders have already said they will join the rally, although the influential umbrella union CGT will not attend.

In this context, the government’s initial challenge is to ensure that the IMF bill wins sufficient approval in the lower house. The Casa Rosada does not know how the thirty deputies linked to Kirchnerism will vote, even now.

“The only possible way”

Speaking in a radio interview on Friday, Economy Minister Martín Guzmán revealed that Argentina would receive an almost immediate disbursement of seven billion SDRs (special drawing rights) from the IMF, or about 9, $8 billion at the current exchange rate, if the lender’s board approves the deal.

Calling the deal “abnormal” compared to other IMF deals with nations, the minister said the deal reached by the Fernández administration was “the only possible way” to honor the payment of the debt.

Guzmán said it was essential that Congress approve the deal, but acknowledged that “nobody in our [political] strength loves that the IMF is in Argentina.”

“We started to govern with a debt of 44.5 billion dollars and we had no reserves available to pay it. So the only way was to reach an agreement that would allow the IMF to send us the dollars with which refinance the debt contracted by the previous government, and that is what we have done,” he explained.

Guzmán indicated that “the reduction of inflation is the main objective of macroeconomic policy” and considered that “the accumulation of reserves is fundamental” for this, because “the first thing we need is to calm the expectations and, if there is a shortage of international reserves, there is no way to achieve it.”

Regarding the re-segmentation of energy subsidies, he assured that “no one is going to see increases greater than those of wages”. He explained that “the key word is ‘segments’ – a scheme is proposed where those who are in a situation of greater vulnerability and who today receive the social tariff will have an annual increase much lower than the variation in average wages” .

– TIMES/NA

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