Argentina’s Congress has approved President Milei’s request to negotiate a new loan with the IMF, seeking to boost foreign reserves and cover upcoming debt payments. The exact loan amount remains undisclosed. Protests erupted against Milei’s austerity measures during the approval, indicating public disapproval of policies associated with IMF agreements as the government aims to tackle rampant inflation.
On March 11, 2023, Argentina’s Congress approved President Javier Milei’s request to negotiate a new loan agreement with the International Monetary Fund (IMF). This comes on top of the $44 billion that Argentina already owes the lender. The request is for a new 10-year loan aimed at bolstering the central bank’s foreign currency reserves and addressing forthcoming debt payments. The specific amount of this prospective loan has not been disclosed.
According to a 2021 law, the Argentine president requires authorization from both houses of Congress to access IMF funds but only needs support from one house to proceed. In this case, Milei received approval from the lower house, the Chamber of Deputies, with 129 votes in favor, 108 against, and six abstentions, thus allowing him to move forward with the loan agreement.
Milei leads a small libertarian party that is in the minority in Congress but has been able to form ad hoc alliances to advance its agenda focused on cost-cutting. Concurrently, thousands protested outside the legislature against Milei’s austerity measures and his ongoing negotiations with the IMF. Notably, protester Rodolfo Celayeta remarked, “Every time something is agreed with the IMF, things get worse for us.”
Despite relatively peaceful protests, tensions were evident as reports surfaced of minor clashes, leading to injuries among demonstrators and police. Security Minister Patricia Bullrich characterized the security operation involving 2,000 officers as “successful” amidst these events.
Milei has stated that securing this new loan will facilitate debt repayments to the central bank and assist in “exterminating” the country’s rampant inflation, which is deemed a chronic issue. With one of the highest inflation rates globally, Argentina witnessed inflation rates decrease from 211 percent at the end of 2023 to 66 percent currently, as the government implemented significant spending cuts following Milei’s inauguration in December 2023. Discussions with the IMF have been ongoing since November regarding a new extended fund facility (EFF) to replace a former agreement established in 2022 that helped refinance debts from a record-breaking $44 billion loan negotiated in 2018 under President Mauricio Macri.
The approval for a new IMF loan signals both a crucial financial maneuver for Argentina’s economy under President Milei and highlights the contentious political landscape. With public protests reflecting widespread discontent over austerity measures, the government’s efforts to combat inflation remain under scrutiny. The dynamics in Congress and Milei’s ability to forge alliances are essential in navigating these challenges as Argentina continues to manage significant debt obligations.
Original Source: www.news-expressky.com
