June 24, 2024

Brighton Journal

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IMF Summit: Concerns about meeting targets, Cristina Kirchner’s electoral strategy and Alberto Fernández’s political future

IMF Summit: Concerns about meeting targets, Cristina Kirchner’s electoral strategy and Alberto Fernández’s political future
Alberto Fernandez and Kristalina Georgieva during a meeting in New York

(From Washington) The US capital has already received economic ministers, heads of central banks, financial experts, global investors, academics and technologists. From tomorrow they will participate in the spring meetings of the International Monetary Fund (IMF). and the World Bank (WB).

Kristalina Georgieva set the agenda for the summit and her geopolitical mission was to propose solutions to the international community affected by the synergistic effects of the war in Ukraine and the growing instability of the democratic canon.

Those consequences are linked to the conflict unleashed by Vladimir Putin indicates an increase in energy expenditure, Rising food prices, unprecedented famine in Africa, uncertainty in the financial system and the postponement of targets set by the Paris Climate Change Agreement.

This complex situation at the beginning of the 21st century reveals the contours of the future that encourage the emergence of disruptive global movements, as happened in Brazil and the United States, and challenge democracy as a method of resolving social conflicts.

From that point of view, Argentina’s political and economic climate worries Washington Because of its potential impact on compliance with the already restructured fiscal compact on the central bank’s reserve target after a severe drought wreaked havoc on harvests and tax collections.

Sergio Massa and International Monetary Fund (IMF) Deputy Managing Director Geeta Gopinath during an official meeting in Washington

The IMF accepted Re-calibration A firm target for reserves to be accumulated at the central bank by 2023, but at the multilateral body’s board, they said it would be a difficult target to consider due to economic conditions affected by a severe drought in recent months. Not only is the 10,000 million dollars not entering the country due to the failure of the harvest, but because the absence of that number will affect consumption and consequently the collection of taxes and fees.

In this case, the weakness caused by the drought in the reserve may also affect the amount of public resources allocated to the government’s investment account, they explained last night in DC. If that working hypothesis is confirmed over time, The fiscal deficit target of 1.9 percent in 2023 will enter the immediate danger zone.

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Joseph Biden has pledged to Alberto Fernandez to help him deal with a possible conflict with the International Monetary Fund over agreed targets and could prompt the US president’s cooperation in May when the board analyzes numbers for the first quarter. 2023. I will try to check target Reserves: It will now revise the fiscal deficit target.

During their shared meeting in the Oval Office, Alberto Fernandez told Biden that the National Security Council had played Argentina’s favor during negotiations with the IMF. The Treasury Secretary, however, was reluctant The technical and political arguments presented by Massa to the IMF staff and board must be accepted.

The president praised Biden’s national security advisers, Jake Sullivan and Jose Gonzalez, and questioned U.S. Treasury Secretary Janet Yellen. Democratic Party leader Alberto Fernandez heard the complaint, and during a meeting in the White House cabinet room between officials from the two administrations, Advised Yellen to get to Casa Rosada During a new dispute with the IMF over the targets met in the Extended Facilities Agreement.

Alberto Fernandez and Massa left a gesture of political will to Biden, but it was explained to Infobae that the gesture did not mean something in Yellen’s proximity. Overall discount In favor of Argentina. “We know the country’s record, we know about Biden’s promise in the cabinet room. But by no means will there be a fast track before the board”, they warned this special envoy in DC.

When Alberto Fernandez and Joseph Biden met at the Casa Rosada

In addition to doubts about the deficit target, in Washington they question the government’s decision-making. Prohibition Act for Retirees It was admitted to the delegation when the extraordinary sessions ended. In this particular case, criticism ran from IMF staff to Yellen’s office at the Treasury Department.

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In DC they promise This moratorium affects the target of fiscal deficit, It is not officially communicated, it is irrelevant and should be limited to its maximum exposure. “The financing cost of the new pension ban should be reduced through stronger regulations, allowing access only to those with the greatest need,” IMF Deputy Managing Director Geeta Gopinath said in an official statement.

Alberto Fernandez questioned the critical view of IMF staff and the US Treasury Department. “I explained to Kristalina (Georgeeva) when I zoomed into Salta airport. This moratorium means that retirees receiving benefits are self-funded through their own contributions. There is no financial cost here, we imposed another ban by decree last year and they did not complain. They are misreading the Prohibition Act, this is not a Jubilee”, the President assured his circle of trust before leaving for Sabathmalal to spend the Holy Week.

Massa, who was in his office at the Palacio de Hacienda, and Gopinath, who joined from his office at the IMF, were also present at the Zoom that the President mentioned. Georgieva and Gopinath broke contact, unconvinced by Alberto Fernandez, and now it was Massa’s turn.

Gopinath will welcome the Economic Minister on April 14. If there are no changes in the official agenda. IMF officials intend to reduce the number of beneficiaries of the moratorium – estimated at 800,000 – and want to know whether Argentina’s economic situation is compatible with a program already covered by the fund.

Massa had already heard this statement at the G20 summit in Bengaluru (India) when he was discussing changing the central bank’s reserve-linked target. “I walk through Argentina. Not you. And I’m not going to do anything that could cause an explosion. Shall I explain?”The minister said before the technical proposals of Georgieva and Gopinath.

Massa and Georgieva shared a dinner of honor at the G20 Summit in Bangalore (India).

Ultimately, the IMF staff and board accepted the change in the central bank’s reserve accumulation, which Masa negotiated in India. But this does not mean they are now accepting a possible change in the percentages of the deficit forecast for 2023. In Washington It predicted a tough battle with directors from Japan, Brazil and GermanyDespite Biden’s comments in the White House cabinet room, the secretary considers Yellen an ally.

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In addition to achieving the goals set out in the expanded facilities agreement, questions remain in DC about the political future of Alberto Fernández and Cristina Fernández de Kirchner’s electoral strategy. These questions are linked to the president’s re-election possibilities and the CFK’s decision to drop a run for office in the October elections.

It doesn’t matter whether the Biden official you ask is from the State Department, Treasury Secretary, the West Wing of the White House or the Capitol. This reporter’s response always elicits the same reaction to a confrontation between the president and the vice president. They could not believe the institutional situation. Recalling the last percentage of poor people as measured by INDEC, the surprise turns to an uncomfortable silence when the inflation index for March, known in five days, is forecast.

The IMF summit begins tomorrow with a speech by Georgieva that she will share with World Bank President David Malpass. The presentation by the Managing Director of the IMF and Malpass, titled “The Way Forward: Resilience and Reshaping Growth,” focused on the economic crisis caused by the Covid-19 pandemic, the war unleashed by Vladimir Putin against Ukraine, and the global consequences of climate change.

Massa will arrive in DC on Thursday. Also on his agenda are meetings with the OECD, the National Security Council, the World Bank, the American Chamber of Commerce, the Inter-American Development Bank and the Fund. Massa already knows the four questions that will be asked. When faced with the last question, he says no. It’s not in their plans right now.

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The government is launching a diplomatic offensive in Washington to secure additional funds to bolster the Fed’s reserves.
Faced with the possibility of a crisis affecting the deal with the IMF, Alberto Fernandez reached out to Biden for support.