Argentina’s Congress has authorized President Javier Milei to pursue a new loan from the IMF, adding to an existing $44 billion debt. The loan aims to enhance foreign reserves and manage debt payments. Protests against austerity measures have accompanied the legislative decision, reflecting public concerns over the impact of IMF negotiations.
On Wednesday, Argentina’s Congress approved President Javier Milei’s request to negotiate a new loan from the International Monetary Fund (IMF), augmenting the existing $44 billion debt owed to the organization. Milei, who presented his case to lawmakers on March 11, aims to secure a 10-year loan intended to enhance the central bank’s foreign currency reserves and manage upcoming debt obligations.
While the amount of the new loan has not been disclosed, its approval is significant given that under a 2021 regulation, the President must obtain authorization from Congress to engage with the IMF, requiring support from at least one legislative chamber. Milei successfully garnered 129 votes in favor, against 108 opposed, coupled with six abstentions in the Chamber of Deputies.
Despite being in a minority, Milei’s libertarian party has managed to forge temporary alliances to advance its financial policies. The vote coincided with large protests outside the legislature, where demonstrators expressed discontent over Milei’s austerity measures and negotiations with the IMF, reflecting a sentiment that agreements with the IMF exacerbate their hardships.
Protesting retiree Rodolfo Celayeta, 73, voiced concern about the repercussions of IMF agreements, stating, “Every time something is agreed with the IMF, things get worse for us.” Additionally, recent protests have seen heightened tensions, leading to injuries during confrontations with police; however, recent gatherings were noted to be more subdued.
Milei advocates that the new loan will enable the government to settle debts with the central bank while also combating Argentina’s persistent inflation crisis. With one of the highest inflation rates globally, Milei, who assumed office in December 2023, has initiated significant cuts in public spending, resulting in a decrease in inflation rates—from 211% annually to 66% currently—even while poverty rates have unfortunately increased.
Discussions with the IMF commenced last November regarding a new extended fund facility (EFF) to succeed an earlier agreement from 2022. This EFF would facilitate refinancing for Argentina’s debt linked to the substantial $44 billion loan established during the presidency of Mauricio Macri in 2018, marking the highest total ever attributed by the IMF.
In conclusion, President Javier Milei’s recent Congressional approval to negotiate a new IMF loan highlights Argentina’s ongoing economic challenges and the government’s strategy to stabilize its financial situation amidst public unrest. The approval of this loan aims to bolster foreign reserves and mitigate impending debt obligations, although it has sparked widespread protests reflecting citizen discontent towards austerity measures. With inflation remaining a critical issue, Milei’s administration faces the dual challenge of addressing economic recovery while managing public opinion.
Original Source: www.rfi.fr
