The Argentine Congress approved the agreement with the IMF amid divisions within the ruling party

The Argentine Congress approved the agreement with the International Monetary Fund (IMF) that will allow the refinancing of 45,000 million dollars, a sum of money never before granted by the financial institution in its history. That debt was contracted by the president Mauricio Macri (2015-19), but that money, current authorities maintain, served to finance capital flight. Despite the remarks, the Peronist government needed the votes of the right to give the green light to the understanding with the IMF because a good part of the supporters of the vice president Cristina Kirchner in Parliament they expressed their rejection of the terms of that pact. They warned that it will bring new hardships to society. The legislature staged the political distance apparently irreparable that separates the vice president from Alberto Fernandezthe man she chose in 2019 with her finger to lead the presidential formula that defeated Macri in the elections that year.

The support of the macrismo was the one that facilitated in the early hours of this Friday that the Senate turned into law the project that endorses the agreement with the IMF. At the time of the vote, Cristina Kirchner, as the main authority of that chamber, was not in the room. Quite a symbol that had been repeated last week in the Chamber of Deputies.

Thirteen senators from the Frente de Todos, the ruling coalition, voted against the pact and expressed a common position through a text: “This artificial crossroads to which they intend to subject us, if accepted, it would be transformed into the defeat not only of the people, who will suffer the consequences of this pact, but also, it would be transformed into the painful defeat of politics, a true and vital tool that from our but fundamentally as militants, we are not willing to accept”. The senators also warned that the agreement will be “difficult to comply with” due to the harsh measures that the Government has to take, the effects of which will worsen in the context of the current international crisis derived from the Russian invasion of Ukraine.

a tough adjustment

The Argentine authorities have committed to reduce the fiscal deficit gradually until reaching 0.9% of GDP in 2024, eliminate subsidies for energy and other public services, as well as substantially reduce the cost of monetary issue that allows sustaining public policies. Another of the complex goals that lie ahead is lowering the inflationary Index, which exceeds 50% per year. Fernandez announced the beginning of a “war” against the rise in prices that hits especially the more than 40% of the poor in this country.

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President Fernández privately and publicly expressed his satisfaction at having closed the negotiations with the IMF, without denying the enormous difficulties that await him, for which he blamed the right. The relief that Fernández believes he feels is due in part to the fact that the country avoided the suspension of payments. He should soon pay 2.8 billion dollars that are not in the coffers of the Central Bank.

The negotiations with the IMF were long and uncertain as of 2020. While they were taking place, the Government launched some aspects of the required adjustment. The cost of these austerity measures was reflected in last year’s legislative elections in which Peronism lost more than four million votes. The global impact of the agreement with the Fund could seriously condition Fernández’s aspirations to be re-elected in 2023.