Conversations with the Monetary Fund continued this Tuesday in the wards different than expected. The government had announced that the head of cabinet, Nicolás Posse, and the Minister of Economy, Luis Caputo, would meet for the first time with the head of the organization, Kristalina Georgieva, at the World Economic Forum in Davos, but finally It has been postponed until tomorrow.
Instead of the expected agenda, Treasury reported that officials held a meeting with the Fund’s deputy director general, Gita Gopinath, with whom they “dialogued on the staff level agreement reached with the organization”, and that they will have a meeting with Georgieva tomorrow, before the hearing with Javier Milei, without providing further details.
This Tuesday’s meeting was the first activity of the journey of the delegation led by Javier Milei, who went to the summit where the leaders of the main powers and the owners of the largest assets meet. The change of agenda occurs amid Washington’s doubts about the adjustment plan and the government’s wait for the approval of a new disbursement.
Although last week the government agreed to relaunch the collapsed program and the Fund has committed to disbursing this amount 4.7 billion dollars In support of the adjustment, the agency has not confirmed when the board of directors will meet to authorize it. Caputo hopes it will happen in the next two weeks, as he needs dollars to pay off payments through April, including $1.95 billion due at the end of the month.
Before the meeting, Georgieva sent out a new signal of support by emphasizing that the organization is watching “progress on all fronts” of the Argentine economy since Milei took office and this is what he does “very aggressively correct some deficiencies” such as high fiscal deficit and lack of reserves. “So far so good,” he said Bloomberg.
Milei and his entourage traveled to the Davos forum in Switzerland on Monday, seeking to position themselves as leaders of libertarian ideas and maintain contact with leaders of major powers. “The goal of the trip is to plant the ideas of Freedom in a forum that is contaminated by the socialist 2030 agenda this will only bring misery to the world,” the President had said earlier during the flight.
As for the Fund, the libertarian said that the goal is “to continue to speak and make clear the conviction we have in this change of direction.” This will be the spirit of the meeting he will have with Georgieva tomorrow, the first face to face, given that last November, when he went to Washington, his officials were received by his number two, Gita Gopinath.
Close to the president they assure that the negotiations with the International Monetary Fund are “protocol” and lower the tone of the talks. The most important thing – they believe – will be the face-to-face talks that could take place with the White House Secretary of State, Anthony Blinken, the English Prime Minister, David Cameron, and the French President, Emmanuele Macron.
Milei’s first international tour coincides with the journey of reforms promoted by the Government. Both the Fund and Wall Street are waiting to see what remains of the DNU and the omnibus bill, a key chapter as it contemplates a third of the fiscal adjustment agreed with the organization last week to move from a primary deficit of 3% to a surplus of 2% of GDP.
The technical agreement reached with a mission of the organization was seen by the large New York funds as a good sign that allows them to “buy time” until the harvest dollars arrive. But they also warn that it is necessary to know the conditions of the agreement and want to see how the 25.5% monthly inflation will be reduced and the impact of the debate in Congress on governability.
The “basics” bill provides for tax increases and money laundering to expand collection, but also proposes the privatization of public companies, the repeal of pension mobility and the liquidation of the ANSES FGS. It also facilitates the dismissal of public employees, authorizes dollar borrowing without going through Parliament and deregulates large sectors of the economy.
The difficult negotiations to arrive at the approval of the law were one of the points touched on in the Council of Ministers on Sunday in Olivos, preceded by the trip to Davos. Among the ministers there was concern about the first general strike called by the CGT for January 24th as a sign of rejection of the mega DNU which promotes a profound labor reform, currently blocked by Justice.
Milei left Ezeiza at 5.50pm on Monday and arrived in Frankfurt at 7.05am (Argentina time) this Tuesday and then flew to Zurich, from where he left by car for Davos. Accompanying him, in addition to Posse and Caputo, were his sister Karina Milei and Foreign Minister Diana Mondino. The last time an Argentine president went to Davos was in 2021, when Alberto Fernández attended.
Source: Clarin
