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This debt restructuring mechanism allows Argentina to pay US$44 million from 2026 to 2034 in return for a commitment to reduce its fiscal deficit by 2.1 percent by 2024.
With 56 votes in favor, 13 votes against, and three abstentions, the Argentine Senate on Thursday approved the Extended Fund Facility (EFF) agreed with the International Monetary Fund (IMF) to refinance a US$44 billion debt contracted by former President Mauricio Macri in 2018.
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This EFF establishes that the Argentine government can pay the debt from 2026 to 2034 in return for a commitment to reduce its fiscal deficit by 2.1 percent by 2024.
The facility will soon be submitted to the approval of the IMF board in Washington to enter into force. Once this occurs, Argentina will receive a US$9,8 billion disbursement, which will allow it to pay US$2.9 billion maturity that expires next week.
"We had to agree to renegotiate with the IMF as the only way to prompt economic growth and reduce inflation," pro-government senator Ricardo Guerra said, recalling that this institution has previously failed to prevent economic crises in Argentina.
In Argentina we don't say "happy" #InternationalWomensDay, we remember all those women we lost, we keep fighting for our basic human rights and we stand together so not one woman feels alone. We say #NiUnaMenos to fight against femicide bc we're losing a woman every 27 hours #8M pic.twitter.com/dcAeH5evus
— jess (@kellettsgaines) March 8, 2022
IMF spokesperson Gerry Rice said that getting the EFF to improve Argentina’s economic situation will be a challenge because the current armed conflict in Ukraine has significantly increased the prices of commodities.
In February, this Latin American country reported a 4,7 percent increase in its consumer price index and a 7,5 percent increase in food prices, especially those of eggs, milk, and oil.
“We have inherited problems that we have not yet managed to solve: the debt and its consequent economic recession. Although we know that the EFF is not the optimal solution, it gives us more opportunities to face them,” Argentine President Alberto Fernandez stated.
Argentina, Chile and Uruguay: Large-scale forest wildfires. pic.twitter.com/Y3msclR63h
— teleSUR English (@telesurenglish) January 4, 2022
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