Argentina’s Congress has authorized President Javier Milei to negotiate a new IMF loan to support the country amid ongoing austerity measures. The decision, following significant public protests, comes as inflation rates have eased under Milei’s administration, despite rising poverty levels. The new loan agreement aims to address existing debt and economic challenges within the country.
Argentina’s Congress has authorized President Javier Milei to negotiate a new loan agreement with the International Monetary Fund (IMF), adding to the existing $44 billion debt. This decision was made on March 11, after Milei requested a 10-year loan to reinforce the central bank’s foreign reserves and manage upcoming debt obligations, with specific loan details yet unrevealed.
Under Argentine law enacted in 2021, presidential authorization is required from both congressional houses for IMF loans, yet only one house’s approval is necessary to proceed. The voting results from the Chamber of Deputies were 129 in favor, 108 against, and six abstentions, granting Milei the authority to finalize the loan agreement.
Milei, leading a minority libertarian faction in Congress, has formed strategic alliances to advance his fiscal austerity program. During the vote, significant protests occurred outside Congress, reflecting public discontent with Milei’s strict austerity measures and IMF negotiations, although they were less violent than prior demonstrations.
Milei asserts that the new loan is essential for settling central bank debts and combating Argentina’s enduring inflation, which is among the highest globally. Since assuming office in December 2023 and implementing substantial cuts to public expenditure, inflation rates have dropped from 211% at the year’s end to 66%. However, this cost-control approach has led to increased poverty levels.
The Argentine government initiated discussions with the IMF in November 2023 regarding a new Extended Fund Facility (EFF), aimed at replacing the previous arrangement established in 2022. The EFF’s purpose is to facilitate debt refinancing, addressing the significant $44 billion loan from the IMF that was negotiated by former president Mauricio Macri in 2018, marking it as the largest loan granted by the IMF.
In summary, Argentina’s Congress has approved President Milei’s request for a new IMF loan to aid the nation’s economy amidst significant public protests. Although inflation and poverty present ongoing challenges, Milei’s austerity measures appear to be slowing inflation rates. The negotiations with the IMF for a new Extended Fund Facility are a continuation of efforts aimed at managing Argentina’s substantial debt obligations, reflecting the country’s turbulent fiscal history.
Original Source: www.france24.com
