Finally, the Minister of Economy Sergio Massa was able to announce this Friday that the government has reached an agreement with the Paris Club to refinance the debt for $ 2,400 million.
“I want to tell you on the day of today we have successfully concluded the agreement with the Paris Club for Argentinato return to normalize the relations of our country, our companies, our workers, with the countries of the European bloc “, said Massa in the middle of an act in Escobar in which he announced loans to SMEs.
The deal with the Paris Club was renegotiated after the administration of Martín Guzmán. Now, the negotiation has made it possible to eliminate fines and penalties, for which the amount to be paidr was reduced from $ 2.4 billion to $ 1.972 million.
Argentina entered into default with the group of 19 countries that make up the Paris Club – which represent 60% of world GDP – in 2002. In 2014, then-minister Axel Kicillof agreed to pay that 10,000 million debt. dollars over five years.
But the payments were halted in 2019, when a new deal was opened in the midst of the foreign exchange crisis generated at the end of the Mauricio Macri government. At that time there was an unpaid balance of 2,000 million US dollars which, due to the various violations, have brought the rate to 9%.
Now in this negotiation it was possible to lower the rate and extend the half-yearly installments until 2028. Therefore, in the first three semesters, the rate will be 3.9%. And from the fourth payment, the rate gradually increases until it reaches a weighted interest of 4.5%.
The Ministry of Economy highlighted that this is “a good rate for the current international context characterized by the increase in international rates”. The next payment will be made in December of this year.
“The negotiation prioritized that the payment profile was sustainable and did not compromise the process of strengthening international reserves”. Therefore, the average rate will be $ 170 million.
Massa’s proposal was “more aggressive” than that of Guzmán, according to the same definition of the Palace of the Treasury. The agreement provides that Argentina will return 40% of the capital due over the next two years. The former minister’s original proposal was to return 58% of the capital by 2024.
Although the amount of debt to the Paris Club is not that high, the lack of a deal was “a splinter in the finger” for Argentina, as characterized by the economic team.
The reason is that the lack of agreement it hinders the chances of obtaining funding not only for the country but also for the private sector. This should now facilitate negotiations especially for companies related to the energy sector.
To close the deal, Massa sent two of his closest collaborators to Paris: the head of INDEC, Marco Lavagna, who advises him on international finance issues, and the head of consultants, Leonardo Madcur. The minister preferred to monitor the negotiation remotely, so as not to be exposed if the agreement was postponed again.
Massa signed the videoconference agreement with Emmanuel Moulin, director of the French Treasury and formal president of the Paris Club.
“The deal we closed today represents in terms of financial relief a reduction of $ 248 million from present value on a debt of $ 1,972 million, “they stressed.
“Resolving this situation today contributes to supporting the recovery of economic stability, opening up new possibilities for bilateral financing of infrastructure projects and the promotion of exports”, pointed out by Economia.
In Escobar’s deed that he shared with Secretary of Industry José Ignacio de Mendiguren, Massa announced an outlay of over $ 500,000 million to finance SMEs.
There he argued that the state seeks “promote credit for the productive sectors and that generate work.
“We have to create jobs, export SMEs,” Massa said.
AQ
Source: Clarin
