With the break-up of Argentina, Finance Minister Martin Guzmán is pushing for an agreement by May with the International Monetary Fund to repay $ 44 billion in debt. To win the IMF’s acquiescence, it will close the budget gap, he said in an interview Friday.
It is the traditional path followed by Argentina, which has defaulted on sovereign debt nine times, when its economy has bottomed out, as it has now done during a punitive pandemic that led to a 10% economic contraction in 2020. But Guzmán said his plan does not reach the draconian austerity measures the IMF imposed with other governments.
“We are using the negotiations with the IMF as an opportunity to try to break with the patterns of the past,” said Guzmán, an economist trained at Columbia University.
The twist on this occasion is that Guzmán and President Alberto Fernández belong to a party that has long faced off against the IMF, blaming it for Argentina’s problems. And they face a formidable opponent within the ruling Peronist coalition that pits lawmakers against IMF belt-tightening policies.
Vice President Cristina Kirchner, leader of a far-left faction, calls for strong state intervention and public spending to preserve the purchasing power of Argentine workers, a policy that marked her two terms as president.