The government made two massive announcements yesterday evening, and although the topics have little to do with each other at first sight, it’s hard to think that the timing was a coincidence.
-On the one hand, Economy Minister Martín Guzmán said Argentina would ask for an Extended Fund Facility (EFF) agreement with the IMF, looking to repay the country’s USD 50 billion debt raised during Macri’s administration. EFFs are longer-term programs than Argentina’s original Stand-By agreement reached during the Macri era, and usually come with a “strong focus” on longer-term “structural adjustments”, the IMF says. This would give Argentina closer to a decade to repay its IMF debts (instead of the 5 years usual for Stand By deals), but it will also likely force the government into cutting spending and raising taxes and tariffs, as well as possibly discussing further pension and labor reforms, which could be strongly unpopular with much of Fernández’s base.
-Barely an hour after Guzmán’s words to foreign news agencies, Legal & Technical Secretary Vilma Ibarra went on several TV channels to announce the government would send the delayed abortion legalization bill to Congress this month. Argentina already held a large-scale debate about the issue in mid-2018, when Mauricio Macri’s government sent a similar bill to Congress which passed the House but was ultimately defeated in the Senate. Macri himself did not support the project, but said he “opened the debate” in a context of rising feminist demands in Argentina since 2017. The feminist movement hopes that a new government which explicitly backs the bill will be enough to make the difference this time.
-Also leaked yesterday was the news that the government will start using a new formula to calculate pension payments, which will likely result in less generous state spending, as inflation will be taken out of the equation. Is this part of the concessions made to the IMF? And is the government looking to bury bad-tasting news to its supporters amid other headlines that look more palatable to them? That will likely be a debate within the different factions of the ruling coalition over the coming weeks and months.
-In other news, President Fernández joined Evo Morales in his return from his Argentine exile to Bolivia yesterday, after his ally Luis Arce recovered power for the indigenous, social-democratic MAS party in his the Andean nation with a landslide presidential victory. The Argentine President and the former Bolivian leader walked to the Villazón-La Quiaca international border crossing, in a picture that marks a victory for the Argentine leader after he strongly backed Morales during his deadly ousting last year.