The Government will begin a mission in the United States in the next few days that will include meetings with the IMF’s technical staff, the continuation of negotiations with G20 countries and a stop in New York for a face-to-face meeting with investors. The Spring Summit of the International Monetary Fund this year will be marked by the institutional crisis that put at risk the continuity of Kristalina Georgieva as Managing Director.
The annual meeting, the most important held by the IMF and the World Bank, will also be accompanied by a meeting of finance ministers and central bankers of the G20 to continue negotiations on two issues that will impact Argentina’s debt restructuring agenda. : the possibility of reducing the interest rates of the Fund’s programs and the distribution of special drawing rights (SDR) from rich countries to low and middle-income countries.
For the Argentine delegation that will travel the weekend and begin its activity tomorrow, a positive balance of the tour would imply, official sources explained to Infobae, that the statement that comes out of the G20 during the week includes another explicit reference to some of those two initiatives. It is the only way, they envision, that the summit of presidents of that forum leaves the IMF board as a mandate to specifically discuss the proposal.
The Government will carry out a mission in the United States that will include meetings with the IMF’s technical staff, the continuity of negotiations with G20 countries and meetings with investors.
In the midst of this debate and the accusations that weigh on Georgieva, the Government will continue this week the technical meetings with the IMF staff. From the Ministry of Economy they assure that the face-to-face contact next week will not be a “resumption” of negotiations, since they affirm that the contact was virtual permanent between Argentine officials and Washington.
The keys of the next days
1. Georgieva’s continuity at the head of the IMF: the European countries have already begun in the last hours to take a position on the institutional crisis in the Monetary Fund, which put the Bulgarian economist on the tightrope. France, Germany, Great Britain and Italy, according to the English newspaper Financial Times, will support the managing director. Europe is the continent that historically defines the head of the body, while the United States usually remains in command of the World Bank. The White House’s position on the managing director is still unclear.
The Government chose to read the conflict with Georgieva as a kind of “bill pass” of a certain financial sector, as the Bulgarian was the promoter of two measures such as the creation of a new type of financial program of the Fund, with more conditions. lax and accessible for the countries that sign them and a “spill” of SDRs towards middle and low income countries on the part of the richest nations.
For Héctor Torres, former Argentine representative to the IMF board, ”Kristalina Georgieva is very weakened. Even if he remained in office, his ability to use political criteria to distort technical evaluations of the Staff is clearly diminished, “he considered in dialogue with Infobae.
For his part, Daniel Marx, economist, director of Quantum Finanzas and also negotiator of the Argentine debt on different occasions, considered that “it is too early to know” if Georgieva is going to continue or not. “This is an investigation that began a few years ago, it is evolving. It may or may not have a quick outcome, but there are issues of perception that are important, especially how the director feels supported by the US, but it is not necessarily going to be issued on the issue, “he mentioned before this medium.
2. Discussions over interest surcharges: this is one of the central issues that IMF officials and G20 representatives will seek to debate at this summit. It is a proposal driven by some countries, including Argentina. According to the government estimates, the current interest rates imply about 900 million dollars a year for the country.
The surcharges charged by the IMF on loans to certain countries, strictly speaking, have already been under review by the IMF itself for some years. The G24, a forum in which Martín Guzmán regularly participates, demanded that the Monetary Fund suspend this policy in the midst of the global crisis that the pandemic generated.
By definition, surcharges depend on the amount and term of credit outstanding on loan from the Fund. The spirit of these interest rates is that the IMF can have income that allows the agency to accumulate precautionary balances.