The former director of the International Monetary Fund (IMF) Alexander Wernerwho granted the credit to Mauricio Macri, called the new deal “lousy” for both partieswhen analyzing the result of the intense negotiations of the last weeks.
Referring to the time the negotiation took, Werner considered that “it gives the impression that it was very difficult to agree” and evaluated that “it is a terrible agreement, both for Argentina and for the Fund”, since “It is marked by the limits that this Government sets, based on what it is willing to do“.
In turn, in statements to radio Cologneopined that “within the IMF there must be very important abstentions, many people who say that it is better for the Fund and for Argentina not have the agreement“.
The IMF supported the government’s measures: “They are positive for strengthening reserves”
Along these lines, he stated that the go-ahead would be given within the body “because politically for the Fund of all the bad choices that they have at the table, going forward seems the best, but I think the abstentions must have been very high”.
Werner opined that “from Argentina the geopolitical weight is overestimated that the country has and, in this sense, the minister overestimated his ability to obtain additional resources and took the negotiation to the limit“.
Regarding Sergio Massa, he added that “given the urgency that the country has from a macroeconomic point of view, but also from a personal point of view due to his electoral campaign, it is convenient for him to close the negotiation, move on to other things, although in reality we’re going to end up in a balance very close to what the Fund originally wanted“.
On the other hand, he mentioned the agency’s interference in the future national administration, after stating that “either explicitly or implicitly, the Fund is already negotiating with those who could be in the incoming government“, for which “it also enters into the negotiation —from the point of view of the Fund— to think about what the result of this review would be for whoever is in the next government.”
“There is a heterogeneous, disorderly and discretionary devaluation which is not the best, but they are the last stages of a very bad programvery dirty that the Fund did”, declared its former director. At the same time, he pointed out that “the core point of the negotiations was additional resources” and, in this sense, he considered that the position of the IMF prevailed, achieving that “almost no additional resources were available above what was originally projected”.
With the endorsement of the IMF, the savings dollar rises and the exchange rate improves for regional economies
Werner noted that “Given the drought, we are going to see more adjustment and not much more financing.In addition, he added that the result of the negotiation will reflect an “important policy adjustment, which we are already seeing in the exchange part, and will also be seen in the public finance goals, while the disbursements are in line with what was originally planned.”
When asked about the IMF and its influence in the electoral period, Werner indicated: “I would say that the Fund would like to be as detached from politics as possible and that its officials act accordingly with that maxim”.
However, he clarified that “obviously it is impossible to separate politics from the economy in countries that are going through such strong economic crises”, although he reinforced the idea that “the intention of the Fund is to be as neutral as possible and support policies and not governments, but in an environment where the economy is the main point regarding the next election, It is very difficult that the organism is not in the middle of that”.
What Sergio Massa said about the agreement
The Minister of Economy, Sergio Massa, stressed that an agreement was reached with the IMF for the “next five months”, for which “the discussion on the Monetary Fund is removed from the campaign” and announced that there will be “heavy disbursements in August and November, which largely cover the obligations for this year”.
“The best we can do is have our own program and pay the IMF to get him off the stage of Argentina’s economic policy,” said the Unión por la Patria presidential candidate in an interview with Hard to tame in C5N.
After announcing the first economic measures after the principle of agreement with the IMF, the head of the Palacio de Hacienda clarified that he does not plan to travel to Washington, because the Economy envoys “did a great job to close everything.”
“Until the end of November we don’t have to discuss any subject and that, in some way, will give us the possibility that this uncomfortable neighbor we have in the neighborhood, who we didn’t bring, who is the Fund, brought by Mauricio Macriis not a factor or an additional actor in the campaign, beyond the fact that for Argentina it is an issue to be resolved,” Massa remarked.
“I do not want to speculate with the number because it is up to whoever is going to make the disbursements to be the one to report it,” he said, to later specify that it will be after the IMF deals with it in its Board of Directors. Yes, he anticipated that “a very large package” will arrive in August and another in November.
“The best thing we can have is our own export program, our reserve consolidation regime, make ourselves strong, pay them and remove it from the economic policy scenario,” Massa projected as his roadmap, “in order to have a long-term design of industrial policy, employment and inclusion“.
Alejandro Werner: “Argentina cannot sustain the size of the State it currently has”
The minister said that in the government it is necessary to “assume mistakes, apologize, correct them and learn forward” and promised to “maintain fiscal order”. “Our pillars have to be a trade and fiscal surplus, a competitive dollar and development with inclusion,” said Massa, who stressed that “it was hard for many to recognize the droughtso as not to give excuses to the government”.
Massa admitted that there was a “push and pull” in the negotiation with the Monetary Fund: “One has to be firm in managing the State and professional.”
“We have a mortgage that took the gamer uncle of the family, the former president Macri. It is not good news to be able to order a program with the Fund, because the best thing is not to have to do it,” he said and added: “We do not find the Fund in a Jack chocolate bar, it is an issue that we inherited.”