Article IV and negotiate the new program

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Article IV and negotiate the new program




Luis Cubeddu, head of the IMF mission with Julie Kozak, deputy director of the IMF's department for the Western Hemisphere, after meeting with the Minister of the Economy, Martín Guzman, at the Argentine consulate in New York. 1/28/20


© Provided by Clarín
Luis Cubeddu, head of the IMF mission with Julie Kozak, deputy director of the IMF’s department for the Western Hemisphere, after a meeting with the Minister of the Economy, Martín Guzman, at the Argentine consulate in New York. 1/28/20


He Monetary Fund and the Argentina they will do everything at the same time. An article IV and negotiate the new program. The times, according to what officials of the agency implied in interviews in Buenos Aires and that today they will leave the country to fly to Washington, are managed by the Argentine government. But what has been decided is that there will not first be an IMF assessment of the Argentine economy (article IV) and then a negotiation of the Program. It will be all together.

The usual practice is that both issues are settled in different steps and, with this, there is time to decide which agreement to carry out. But that will not be possible in this case. A person familiar with the dynamics says that starting the two processes separately would mean for the Fund a mobilization and disposition of its staff in a single country (Argentina), which it cannot face in a period where there are many members requesting financial assistance. On the other hand, the IMF mission will return to the country in a month. Last week the President, Alberto Fernández, said that he hopes the country reaches an agreement with the IMF “sooner”. “Doing article IV and agreement at the same time will speed up the times”, says a person who saw the staff.

The agency’s team finished today a mission of what is known as facts finding, a task of collecting data, opinions and impressions on the ground and based on interviews with the main actors: government, opposition, unions, businessmen and analysts market. Julie Kozack, number two from the Western Hemisphere Department; Luis Cubeddu, the Chief of Mission for Argentina; and Trevor Alleyne, the resident representative in the country.

In the IMF they point out that the times to reach an agreement are the government’s, as they have told the interlocutors with whom they have spoken. The agency is willing to move forward according to the pace that the Casa Rosada decides. From a financial point of view, the government is not rushed by time. Only in the last quarter of 2021 did the maturity of US $ 3,600 million of capital for the stand by that he requested with Macri.

What concerns did the staff get noted? The same that emerge daily in public discussion: the fiscal and monetary imbalance, the little room for maneuver that the Government has, the dollar and the inflation.

Another aspect of the state of the economic policy situation and that the Fund staff noted in certain conversations, is that as it happened in the Macri era, the coordination of macroeconomic policy is not completely sealed. Such a fissure in the Cambiemos team was one of the reasons why the IMF’s program with Argentina in 2018 failed (the first one, in just weeks). The IMF will be cautious this time with Argentina.

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