Martín Guzmán travels Monday to negotiate the $ 2,400 million debt with the Paris Club

In order to conclude an agreement for the restructuring of the debt of $ 2,400 million with the Paris Club, whose capital payments have been postponed until 2024, the Minister of Economy, Martín Guzmán, he will travel to France this Monday. He will lead the formal meeting with representatives of the entity on Wednesday.

Guzmán will travel to Paris with the approval of the first revision of the program with the International Monetary Fund and the modification of the objectives for the second quarter – without touching the annual objectives – following the impact of the war between Russia and Ukraine. Fund approval is key for the Paris Club, which showed signs of collaboration with the country in March.

A few days before the approval of the agreement with the Fund, Guzmán and the president of the Paris Club, Emmanuel Moulin, agreed on a new extension of the agreement reached in June 2021, which granted a deadline to face a new restructuring, in exchange of partial payments of interest, and to have postponed the negotiation to the end of June.

This agreement also included financial guarantees from the Paris Club in support of the Extended Facilities program which lasts thirty months, allowing Argentina to secure the financial sources identified in the agreement with the IMF.

The financial guarantees granted stipulate that Argentina will do so during the life of the program Partial payments to the members of the Club in proportion to those made to the other bilateral creditors, according to the terms established in the agreement of June 2021.

Argentina’s negotiations with the Paris Club acquire a singular importance in the current international context, in particular for the acceleration of possible foreign direct investments in the energy sector, sources close to the postponed negotiations.

Alberto Fernández sought support in the G-7 for this negotiation

During his recent trip to Germany, President Alberto Fernández met with G7 leaders, many of them have direct weight in negotiation with the Paris Club.

Fernández had several meetings with the German Foreign Minister Olaf Scholz; with the President of France, Emmanuel Macron, and the head of the European Commission (the Executive of the European Union), Ursula von der Leyen, among others, with whom he took the opportunity to present Argentina’s position on debt in question, as before the negotiations that Guzmán will have to face in Europe.

European leaders were interested in putting together a common agenda that includes energy and food issues, potential investment sectors, in a context in which the war between Russia and Ukraine is expected to continue.

According to reports, Macron highlighted the need for agreements with “the South”, in the sense that Europe first looked to Africa and now has broadened the spectrum to Latin America.

Scholz, for his part, had in his folder to reactivate the Chihuidos hydroelectric power plant projectwhere German appears Siemensand to negotiate with other European countries the export of gas from Vaca Muerta, in order to replace Russia in the import of this vital energy input for Europe.

For his part, the Prime Minister, Mario Draghi, also referred to the potential developments of Vaca Muerta and the value-added activities in Power supplybeyond the fate of a European Union-Mercosur free trade agreement.

lower the rate

The government reached an agreement late last month with the Paris Club in defer payments of debt until 30 September 2024, while an agreement is proceeding that includes a new mechanism for repaying commitments.

In any case, the Government’s goal is to achieve a renegotiation that includes new interest rate conditions, terms and incorporation of the US $ 430 million already paid in two installments in February 2022 and July 2021.

“The goal is to find better conditions for the country as soon as possible. The expectation and what we are working on is finish early the renegotiation with the authorities of the Paris Club “, specify sources of Economy.

The date of 30 September 2024 is due to an agreement between the parties, knowing that the Extended Facilities agreement signed with the IMF grants the maximum duration, even if the objective is to close the agreement much earlier.

According to the calendar inherited from previous efforts, Argentina faced a payment of nearly $ 2,450 million on May 31, 2021 – corresponding to 40 credits granted by 14 countries and in eight different currencies – under the terms of the agreement signed in 2014. by Axel Kicillof, which provided for a grace period of 60 days.

With information from the Télam Agency

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