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News > Argentina

Argentina: 'IMF is Responsible for the Catastrophe', Fernandez

  • Presidential candidate Alberto Fernandez casts a vote at a polling station in Buenos Aires, Argentina, August 11, 2019.

    Presidential candidate Alberto Fernandez casts a vote at a polling station in Buenos Aires, Argentina, August 11, 2019. | Photo: Reuters

Published 27 August 2019

The opposition candidate, who is favorite to win the October presidential elections, told the International Monetary Fund that he will not follow its conventional policies.

The Argentinian presidential candidate Alberto Fernandez received on Monday a mission from the International Monetary Fund (MFI) headed by Roberto Cardarelli and Alejandro Werner, the director of the IMF’s Western Hemisphere Department. After a meeting held in Buenos Aires, the "Front for All" (FT) leader publicly established that he is distancing himself from the structural adjustment policies.


Argentina: IMF Meets Macri and Opposition Fernandez

“Those who have generated this crisis, the Mauricio Macri government and the IMF, have a responsibility to end and reverse the social catastrophe whereby a growing portion of Argentine society is going through,” a FT statement said.

In May 2018, Macri signed an agreement with the IMF to get US$57 billion, the largest liquidity loan in the history of Argentina. In exchange for this money, however, the right-wing government promised to implement severe austerity measures.

Formally, the Macri-IMF agreement allegedly sought to achieve four economic policy objectives: recover economic growth, generate employment to combat poverty, reduce inflation and reduce public debt.

“Besides of the fact that none of these four objectives was achieved, everything has worsened since the agreement: the economy fell -1.7 percent, the debt-to-GDP ratio rose 29 percentage points, unemployment rose to 10.1 percent, poverty grew to more than 32 percent and inflation soared to 53.9 percent,” the Fernandez statement recalled.

But these figures do not summarize everything that happened. The presidential candidate Fernandez reiterated his concern that the IMF credits have been used to finance capital outflows.

"The IMF recognized that Mauricio Macri does not have capacities to overcome this economic crisis. The meme reads, "From the IMF to Alberto Fernandez:“ Mauricio Macri has no capacity... the multilateral institution was lapidary in the meeting it held Front of All presidential candidate.”

According to official figures, the IMF has already delivered US$44.5 billion to the Macri administration. Between June 2018 and July 2019, however, US$36.6 billion were taken out of the country by private investors.

This massive capital outflow means that, in practice, more than 80 percent of the IMF disbursements served to cover the missing dollars gap that international speculators generated.

"This is a flagrant breach of the provisions of Article VI of the IMF Constitutive Act, whose first paragraph provides that no member may use IMF general resources to meet a large or sustained outflow of capital," the Front for All denounced.

Among those participating in the Buenos Aires meeting were also Cecilia Todesca and Guillermo Nielsen, two economists from the Fernandez team who emphasized that the upcoming Argentinean government will recover growth through heterodox policies aimed at promoting employment and production.

"The recovery of the real-side of the economy is a sine qua non condition to stabilize Argentina and redirect its financial situation." ​​

For its part, the IMF mission confessed that the South American country is going through a "power vacuum" after the first round of elections held on August 11.

"Macri not only has no power but also he has no capacity to handle this moment," the IMF envoys acknowledged, as reported by El Destape.

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