Sergio Massa after leaving his meeting at the United States Treasury.
The Chief Executive Officer of the International Monetary Fund received Economy Minister Sergio Massa, a high profile meeting in which the Argentine presented his plans to “order” the economy and achieve the objectives of the program with the agency, when it is expected that approve the technical review that would give the green light to 4,000 million dollars.
Leaving the meeting, Georgieva said the meeting was “very positive” and that he “welcomed” his “strong commitment” to “achieve program goals” and “the strong steps he and his business team have taken to stabilize markets and reverse a high volatility”.
He said the deal on a technical level would be closed “in the next few days”.
“The minister expressed his clear intention to mobilize external support, accentuate efforts to stabilize the economy and ensure sustainable growth with inclusion, according to the principles of the fiscal order and the strengthening of reserves,” said Georgieva. in a note.
After the meeting, Georgieva released the following statement: “I had a very positive meeting with Minister Massa, after a week of productive and highly professional meetings between our technical teams. We exchanged views on Argentina’s fragile economic and social situation, which is also affected by the complex global context. We discuss the impact of the Russian invasion of Ukraine on the world economy and commodity prices, and the resulting balance of payments and fiscal repercussions on many developing economies. “
“I congratulated Minister Massa on his appointment and his expanded portfolio, and for the decisive steps he and his business team have taken to stabilize markets and reverse a highly volatile scenario. The minister expressed its clear intention to mobilize external support, accentuate efforts to stabilize the economy and ensure sustainable growth with inclusion, according to the principles of the fiscal order and the strengthening of reserves “.
“I welcomed yours strong commitment and drive to achieve the objectives of the program– which will remain unchanged – and the conclusive progress made in critical areas including:
– The macroeconomic framework, updated to reflect recent economic developments and the difficult international context.
– Underlying fiscal and policy parameters to ensure current primary deficit targets of 2.5% of GDP in 2022 and 1.9% of GDP in 2023, with an emphasis on better targeting of energy subsidies, transport and water, along with better prioritization of spending and rigorous budget management.
–Solid and consistent implementation of the monetary policy framework to ensure the current objective of supporting positive real interest rates, which in turn is a tool for tackling the fight against inflation and mobilizing domestic finance, as well as ensuring external competitiveness “.
– The accumulation of reserves, which will be promoted by the general policy framework, as well as specific measures (such as the temporary incentive scheme for agro-exports) to strengthen the trade balance.
– The structural agenda, in which more attention will be placed on the revision of tax incentives for companies and on the fight against tax evasion and money laundering, including through efforts to promote information exchange and international cooperation mechanisms.
He then said the teams will continue their meetings virtually this week with the aim of concluding a staff-level deal in the coming days.
Massa came to this meeting – his first face to face with the head of the Fund – after another key meeting, in which he was received by Treasury Secretary Janet Yellen and his team of officials, in what was interpreted as a political gesture towards the minister. The United States is i largest shareholder of the Fund and any decision regarding Argentina must be approved by Joe Biden’s government.
The minister arrived at the agency’s headquarters on 19th Street after 2.30pm Argentine time. He arrived accompanied by Deputy Minister Gabriel Rubinstein; the president of the Central Bank Migue Angel Pesce; the head of the councilors Leonardo Madcur; the INDEC manager Marco Lavagna. The meeting was joined by former minister Silvina Batakis, now president of Banco Nación, who had her meeting with Georgieva when she was head of the economy portfolio. Their presence, they say, is a sign of continuity.
At the lower gate was received by Sergio Chodosthe Argentine representative in front of the organization, whom Massa excluded from the negotiating table with the Fund.
Previously, Massa was at the US Treasury Department for a key meeting with David Lipton. It was after the meeting with Yellen.
The meeting with Gerogieva was reached cwith the review of the last quarter almost closed. But you always have to fix some details and it’s best to do it in person. The goal was to give the green light to this instance (which must then be approved by the board of directors), so that the agency would shell out $ 4,000 million for this phase.
Georgieva also tries to hear from the minister’s mouth the plans to order the economy and its commitment to achieving the goals of the program, which include a adjustment to 2.5% of GDP at the end of the year, control of inflation and reserves of approximately 5.8 billion dollars.
The Fund technicians, led by Luis Cubeddu, have been negotiating for several weeks with the Argentine team. First at Zoom and now in person, here in Washington. Not only have they tried to close this review, but they are looking forward to the next quarter comes much more complicated and even in 2023, where the budget deficit is expected to fall to 1.9%, as projected by the program.
In the environment of Massa they say they had to deal with the “creative accounting ”applied by Tigrese’s predecessor, Martín Guzmán. And that now the Fund team would not be willing to accept.
In addition to his meeting with Georgieva and Yellen on Monday, Massa this week met with senior White House officials, businessmen and investors, leaders of the Jewish community, and traveled to Houston to meet oil company representatives.
Paola Lugone
Source: Clarin
