Right-wing president Mauricio Macri left a public debt that amounts to 95 percent of the domestic product.
Argentina's Lower House Wednesday passed the "Law for the Management of the Sustainability of External Public Debt", which gives President Alberto Fernandez broad powers to renegotiate the country's foreign debt. Now the Senate must consider and approve the new regulations.
"A sovereign state has the right to elaborate its macroeconomic policies, including the restructuring of its sovereign debt," Solidarity Party lawmaker Carlos Heller recalled.
"The situation is critical. The debt burden cannot be sustained," Economy Minister Martin Guzman said and explained that the new law will allow his government to show creditors that it has significant political support.
In fact, the Debt Sustainability Law reflects that broad social consensus as it was approved with 224 votes in favor, two against, and one abstention.
The Fernandez administration is working on a renegotiation process to reduce a debt that exceeds US$323 billion, which represents over 95 percent of Argentina's Gross Domestic Product (GDP).
✔Multiplicaron la deuda— Itai Hagman (@ItaiHagman) January 29, 2020
✔Cambiaron su composición dolarizándola
✔Nos aisalaron de los mercados de financiamiento
✔9 de cada 10 dólares que entraron se fugaron
Hay que reestructurar e investigar la deuda criminal que dejó Macri. Esta ley es el primer paso. pic.twitter.com/BD2PezWGe3
Referring to the right-wing government headed by President Mauricio Macri (2015-2019): "They multiplied the debt. They changed their composition by dollarizing it. We were isolated from the financing markets. 9 out of 10 dollars that entered the country escaped. We must restructure and investigate the criminal debt that Macri left. This law is the first step."
During the parliamentary debate, progressive lawmakers recalled that former President Mauricio Macri increased foreign debt to benefit economic elites through operations that should be investigated.
“The country became indebted in an irresponsible way. On average, they increased the debt by US$30 billion each year and eventually ended up increasing US$44 billion with the International Monetary Fund (IMF),” Justicialist Party lawmaker Maximo Kirchner said.
“We have to say ‘Never Again’ to external debt and start implementing an economic policy that eliminates this problem from society,” he stressed.
Minister Guzman traveled to New York to meet with investors and authorities of the IMF, an international financial institution to which Argentina owes US$44 billion due to an agreement signed in 2018.
He will also hold a meeting with the IMF director Kristalina Georgieva in Rome on Feb. 5.