Silvina Batakis debuts this afternoon in front of the IMF with the pressure of the dollar in the background

Silvina Batakis debuts this afternoon as Minister of Economy in Washington with a visit to the Treasury Department, where she will meet senior government officials Joe Biden, and then continue with the meeting with the CEO of the International Monetary Fund, Kristalina Georgieva, in analyze the program’s challenges with Argentina and seek support for a possible relaxation of the agreement.

Batakis arrived in the capital of the United States on Sunday, together with Deputy Minister Karina Angeletti. This Monday, at 11:30 in Washington (12:30 in Argentina) He begins his official agenda with a meeting with David Lipton, international adviser to Treasury Secretary Janet Yellen, and other senior officials from that department such as Michael Kaplan and Andy Baukol.

In Treasury they want to know how Argentina intends to achieve the objectives of the program with the Fund and the challenges of the Argentine economy, when the dollar and inflation rise, public spending does not go down and reserves are depleted. The minister tries to explain to them that they are committed to the overall objectives of the agreement, but that some flexibility is needed due to the international context. Although the world scene is upset by the war in Ukraine, no one is unaware of the intrinsic peculiarities of the Argentine crisis.

Lipton to hear Batakis’ arguments, but certainly with a certain diffidence. He knows the Argentine case closely as it was Christine Lagarde’s second when the Fund granted our country the largest loan in history, in 2018, which then sank and ended up being renegotiated by Minister Martín Guzmán.

The United States, the majority partner on the Board of Directors of the Fund, is a key player in the approval of any measure on our country in the organization. For this the minister knocks on their doors.

After the Treasury meeting, Batakis will raise something similar to Kristalina Georgieva when you meet her at the construction of the Fund: they want to achieve their goals, but the government is looking for room to maneuver for a deal that many investors and Wall Street pundits already see as a tightrope.

After the settlement of Batakis, Georgieva said that the IMF remained committed to the recovery of the Argentine economy, but stressed that the environment for the implementation of the program was “very challenging”. He then said that “painful actions” would be needed to achieve the goals.

Batakis immediately took care to point out that he would continue with the program and that the objectives set therein would be achieved and, above all, he stressed that the budgetary adjustment committed with the IMF would take place, while specifying that the agreement would be underwent “some changes because the world is changing”.

But, beyond the war in Ukraine and the international context, the crisis in Argentina worsens. In a report that the coaching staff presented to the board in the last review, he had already been warned of “very acute” risks and warned of a “very complex political, social and economic environment”.

The primary fiscal deficit target of 2.5% of GDP appears to be far from being achieved, in the midst of a dollar stampede, with low takings and reserves in the red. Batakis will try to convince Georgieva, but then he will have to work out the complicated numbers at a business lunch this Monday with Ilan Goldfajn, the head of the Fund for Latin America; the second of him Julie Kozack and the head of the Argentine mission Luis Cubeddu.

But beyond what Batakis might suggest to Georgieva and the Fund staff, there is a credibility problem in Washington and Wall Street with the Alberto Fernández government, but above all with Vice President Cristina Kirchner and Kirchnerism itself, which has rejected the agreement with the Fund and seeks to expand public spending.

With the visit of Batakis, the government wants to give a sign of stability and calm in a turbulent context. The same was sought with the summit between Fernández and Biden at the White House, which was scheduled for this Tuesday and which had to be canceled because the US president tested positive for Covid. That photo has been postponed for further notice.

In the late afternoon, Batakis will visit CEO of operations Axel van Trotsenburg at the World Bank. On Tuesday, the minister will have a series of meetings with investors and analysts on Wall Street and bilaterally with the authorities of the companies Google, Chevron, Amazon and General Motors and others with interests in Argentina.

YN