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IMF Agreement: Reactions at Home and Abroad

By | [email protected] | June 8, 2018 3:01pm

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The government’s US $50 billion agreement with the International Monetary Fund (IMF) caused garnered widespread support from some of the most powerful states, such as the United States, China, Germany, and Japan. In fact, American Treasury Secretary Steven Mnuchin commended Argentine Treasury Minister Nicolás Dujovne “on reaching agreement on a financing package to support Argentina’s strong, pro-growth policy reforms,” and assured that “Argentina has the backing of the United States.”

Nonetheless, and as you would probably expect in a country as polarized as Argentina, the agreement caused mixed reactions in the domestic political and economic landscape, with most of its relevant actors coming out to express their opinion about it.

Here’s the reaction of the opposition’s most high-profile members, as well as the analysis of some of the country’s most renowned economists. We left out the statements from the government’s highest ranking officials, who have already expressed their satisfaction about it:

“Once again, the President and his Cabinet are not listening to the people. The great majority of the Argentine people is against the IMF. Any agreement with this organization lacks social or popular legitimacy. And if Macri does not runs the agreement by Congress, it will not have political legitimacy either.”

Pablo Kosiner, head of the Partido Justicialista Caucus: “Resorting to the IMF increasing the sovereign debt by US $50 billion, under the pretext of ‘preventing the crisis and going back to being a normal country’ is not a reason to celebrate. It reflects the failure of policies that after two and a half years were not able to get the country back on a path of growth and development.”

Agustín Rossi, head of the Frente para la Victoria caucus in the Lower House: “Today we have the opportunity to have the main opposition party reject the agreement reached by the government with the IMF, negotiated behind the back of the Argentine people.”

Ignacio de Mendiguren, economist and National Deputy for the Frente Renovador: “The government has agreed a massive plan of austerity measures. Argentina issues debts and commits to policies of austerity. He have been through this before. How do you repay the debt? With austerity? Austerity measures never create wealth. When are we going to talk about producing?”

Nicolás Del Caño, National Deputy for the Frente de Izquierda y los Trabajadores: “[Central Bank Governor Federico] Sturzenneger announced there is no inflation target for 2018. The agreement with the fund consists on implementing brutal austerity measures against the people. But the CGT union meets with the government anyways!! Enough with the truce, we need a general strike now.”

Economist and former Finance Minister Guillermo Nielsen: “Leaving the inflation targets aside, the BCRA’s release is extremely auspicious. If implemented with professional rigor, it could be the beginning of an Argentina without inflation, requisite for achieving healthy growth.”

Fauto Spotorno, economist: “This whole IMF thing is actually a program to eliminate sources of financial stability: Lebacs, financing of the deficit, and reduction of the deficit.”

José Luis Espert, economist: “Sturzenneger set an inflation target of 15 percent for 2017 and ended up being 25 percent. For 2018 he started with 10 percent, then bumped it up to 15 and now that he sees it will actually be twice as much, he says there is no longer an inflation target. Unprofessional.”

“Eliminating the BCRA’s financing of the Treasury is positive. We have to add the prohibition to distribute utilities and the printing of pesos as a result of the dollars the Treasury brings due to the issuing of sovereign debt.”