RIO DE JANEIRO, BRAZIL – His predecessor Mauricio Macri, who is still in office for approximately two weeks, had been promised a total of US$57 billion by the IMF. Just over US$44 billion has so far been disbursed.
Fernández justified the decision with the fact that Argentina would not be able to accept any more funds if it had already become clear that it might not be possible to repay the sum already disbursed plus interest.
The head of state intends to sign only one agreement with the IMF, namely with a rule not to ask for credit. “I won’t sign any agreements that we can’t keep. Mauricio Macri has already done that,” said Fernández, elected in October.
The most pressing question now is how “to reactivate the economy in order to solve the debt issue sensibly”. Macri leaves many troubles behind him for this future government, including “many indebted families”.
The poverty rate had risen sharply during Macri’s four-year term in office. According to the latest calculations, the proportion of the population living below the poverty line stands at 35 percent, the highest rate since 2004.
The Ministry of Finance recently confirmed that 80% the loan granted by the IMF to date has been used to repay foreign currency debt.
A further 14 percent of the amount disbursed was earmarked for debt in Argentinian pesos, one percent for expenditure in foreign currency, such as fuel imports, while four percent is now central bank reserves.
In addition, the South American country is in debt with other international organizations, such as the Inter-American Development Bank (IDB), the World Bank and the Development Bank of Latin America (CAF), for another US$20 billion.
The disbursement of US$5.4 billion is in fact still outstanding, but the installment has been suspended since mid-September.
In addition, seven further installments of another billion each were to be disbursed, according to the plan agreed between the IMF and the departing government once the coming legislative period begins in December.
Fernández now seems to be revoking this agreement.
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