Amid tensions with governors over pooling funds and Chubut’s threat to cut oil and gas supplies, Economy Minister Luis Caputo will travel to Brazil on Tuesday evening attend the G20 summit of finance ministers and central bankers, where Argentina complains about excessive IMF prices, explores financing from Europe and seeks trade deals.
The Minister of Finance, Pablo Quirno, will travel to San Pablo this evening, from The meeting of deputy ministers and vice presidents of the Central Banks will be held on Monday and Tuesday, while Caputo and the head of the BCRA, Santiago Bausili, will participate on Wednesday and Thursday in the main meeting coordinated by the Brazilian Finance Minister, Fernando Haddad, on global growth, financial stability, prospects and international taxes.
As far as he knew ClarionCaputo will hold bilateral meetings and will meet again with the IMF’s number two, Gita Gopinath. The economist left Buenos Aires on Thursday to travel to Brazil to attend the G20, after meeting with the official last Wednesday and with Javier Milei on Thursday to monitor the progress of the adjustment plan. “There are several meetings, we don’t have the details yet”indicate sources from the Ministry of Economy.
After his surprise visit to Argentina and the landing of the United States Secretary of State, Antony Blinken, Gopinath underlined “important initial progress” of the government proposing a strong fiscal adjustment, but also warned about the “difficulties”for which he asked to maintain the real value of pensions and social assistance as well as to bring forward tax changes, while at the same time He rules out the possibility of talking about fresh funds.
Argentina showed its cards to the G20 during last week’s meeting of foreign ministers, where Diana Mondino proposed that “a quick and cost-effective way to bring immediate financial help to middle-income countries is the revision of the IMF surcharge policy which would allow them to accelerate the resolution of balance of payments problemsreturn to a path of sustained growth and regain access to markets”.
Mondino thus returns to the claim made at the time by Alberto Fernández, his former Minister of Economy, Martín Guzmán, and his successor, Sergio Massa. For the tariff increase, Argentina will have to pay this year 3,280 million dollars in interest for the organization. The rate is 4.1%, but the Fund also applies an additional 4 points surcharge to Argentina for exceeding certain limits since Mauricio Macri took out the $44 billion loan in 2018.
Although the chancellor was in tune with the reforms promoted by Brazil to the multilateral system, Relations with the main trading partner continue to be shrouded in a blanket of uncertainty since Lula was absent at Milei’s inauguration in December, after the libertarian leader had threatened during the campaign to sever relations with China and the neighboring country and had proposed the dissolution of Mercosur, which is now being sought “modernize” and expand.
The G20 summit could be the excuse for the first photo between Caputo and Haddad. Mondino analyzed on Wednesday with his Brazilian counterpart Mauro Vieiras the attraction of Brazilian investments to expand gas transportation, scientific and technological cooperation and the tax on waterways. But on the other side of the border, what attracted the attention of the press was the conflict with the governors and the subsequent statements of the Argentine chancellor.
“Brazil is Argentina’s main trading partner, but it doesn’t matter. As they said: It is not important to be the best, but to be better than yesterday and not as much as they will be.“Mondino said this on Friday at a press conference with Blinken at Casa Rosada, where the White House official met with Milei, supported the agreement with the Fund and advocated the elimination of investment barriers, having previously visited Lula .
Last year Argentina almost exported 11.8 billion dollars in Brazil and imported more than 17.3 billion dollars, which resulted in a trade deficit of $5.5 billion. To increase exports, the government tries to reduce the cost of imports and promote trade agreements. According to official calculations, Mercosur’s external tariff includes a steep increase of almost 10% on basic inputs, which increases customs costs on final goods to 20%.
Milei also looks to the European Union, the second destination for Argentine exports and the leading investor in the country 56 billion dollars. Last week Mondino reviewed with his EU counterpart, Josep Borrell Fontelles, Argentina’s accession process to the OECD and expressed interest in the European Investment Bank (EIB) extending financing for investments in new lithium and mining projects, where it competes with the United States. and China.
Source: Clarin
