ARGENTINA REACHED DEAL WITH THE PARIS CLUB
The Paris Club announced an agreement for Argentina to repay its debt over five years, clearing the way for the resumption of international financing.
Most heavyweight opposition leaders in ARGENTINA were left with no option but to welcome the agreement, which does not include the usual involvement of the International Monetary Fund (IMF).
ARGENTINA HAS REFUSED TO SWALLOW THE IMF’S BELT-TIGHTENING RECIPES
since it cancelled its debt with the fund in 2006. Accepting the IMF’s involvement in the case of Paris Club agreement would have been a major concession for the Fernández de Kirchner administration, which would have been difficult to explain to voters on the domestic front.
The Paris Club deal comes after ARGENTINA’S recent settlement with the SPANISH company Repsol over the nationalization in 2011 of the ARGENTINE energy company YPF.
CENTRAL BANK’S FOREIGN CURRENCY RESERVES NOT TO BE DENTED SIGNIFICANTLY
The Paris Club agreement, which has to be reconfirmed by 16 of its 19 member nations, includes a 650 million dollar payment in July. With another 500 million dollars to follow. But financial analysts are saying that, even when the bill to foot looks hefty, the payments are manageable and will not significantly dent the Central Bank’s foreign currency reserves.
ARGENTINE CENTRAL BANK TARGETS GROWTH
The agreement with the Paris Club wrong-footed critics. The president in 2008 failed to deliver on an announcement that the Paris Club debt would be cancelled with Central Bank reserves. The world was hit by a financial crisis soon after that announcement and there was no such payment. This time the payment is for real.
The debt the current ARGENTINE administration has now restructured in FRANCE is a debt previous governments had incurred in and thus the 2001 default has been hindering trade opportunities with the members of the Paris club.
The payment repairs the condition of irregularity that ARGENTINA encountered with some of the most important countries in the world that account for 55 percent of the global GDP. The Paris accord is based on ARGENTINA’S responsibilities and thus will not jeopardize growth.
THE ROLE OF THE IMF
ARGENTINA seems to have fixed one of the wrongs that liberalism left behind, emphasizing the government’s criticism of the role played by the International Monetary Fund in the 70’s, 80’s and mostly in the 90’s (the so called “neoliberal decade) that resulted in the 2001-2002 social, political and economic collapse and historic default.
The Minster of Economy describe in detail the role played by the IMF in ARGENTINA’S previous negotiations with the Paris Club.
IMF, DESTROYER OF NATIONS?
FEE PAYMENT PLAN WITHOUT THE IMF
“In general, all the agreements that the Paris Club has reached have been under the supervision of the IMF. If a country had trouble paying its debt, then it turned to the IMF. That is ARGENTINA’S own history, prior to the 2001 (crisis). Each of the governments turned running to the IMF because they could not keep up with the Club’s payments. The IMF lent them the money but also told them they had to commit with the reduction of social spending, the privatization of public companies. That is what we call 'to condition'. It is the loss of sovereignty and of economic independence,” the Minister of Economy stated, describing the ARGENTINA-Paris Club 2014 negotiation precisely as “atypical.”
Despite the “interference” of the IMF in all the Club’s negotiations, the minister said ARGENTINA “managed to agreen on a fee payment plan without the IMF.”
IMF AND ARGENTINA
WHEN ARGENTINA WAS THE “SUNNY BOY” OF THE IMF UNDER PRESIDENT MENEM,
ARGENTINA REACHES DEAL TO REPAY DEBTS WITHOUT IMF INVOLVEMENT
ARGENTINA also reached a landmark deal with a group of creditor nations to repay its longstanding debt without the involvement of the International Monetary Fund. ARGENTINA is still trying to recover from a massive economic crisis and default more than a decade ago, which followed years of neoliberal reforms backed by the IMF and World Bank. ARGENTINE President Cristina Fernández de Kirchener hailed the deal to pay the Paris Club $9.7 billion.
THE IMF’S FAULT FOR BALKAN WARS
IS IT ALL ABOUT THE VAST AMOUNT OF SHALE RESERVES?
President Cristina Fernández de Kirchener: "It’s the first time in the history of the Paris Club that a country in our conditions has negotiated with a multilateral body without the intervention of the International Monetary Fund, and without giving up the autonomy that a sovereign country should have, and which reveals to us that when we’re allowed to grow, when we’re allowed to develop our own policies, that when we’re allowed to generate jobs and employment, the conditions exist to honor one’s commitments and take charge of its debt. We’re not, as the vultures say, serial debtors. They, the international financial capitalists, are serial predators not just on our economy but of many economies in the world."
Part of ARGENTINA’S plan for economic recovery involves opening its vast shale reserves to foreign oil and gas firms.
ARGENTINE SHALE GAS FINDINGS