Argentina’s Congress has approved President Javier Milei’s request for a new IMF loan to support the central bank and cover debt payments. The vote, with 129 in favor and 108 against, occurred amid protests against Milei’s austerity measures. Inflation has decreased since he took office, while poverty levels have risen. The new loan aims to refinance existing debt with the IMF, following discussions for an extended fund facility.
Argentina’s Congress recently granted President Javier Milei approval to pursue a new loan agreement with the International Monetary Fund (IMF), building upon the existing $44 billion debt. On March 11, Milei requested a new 10-year loan to enhance the central bank’s foreign currency reserves and address imminent debt payments. The specific loan amount remains undisclosed at this time.
According to a law enacted in 2021, the Argentine president must secure authorization from both chambers of Congress to withdraw funds from the IMF; however, only the support of one chamber is necessary to proceed. With a vote of 129 in favor and 108 against, alongside six abstentions in the Chamber of Deputies, Milei is now poised to finalize the agreement.
Despite his small libertarian party being a minority in Congress, Milei has successfully formed temporary alliances to advance his austerity agenda. This vote coincided with large protests outside the legislature against Milei’s stringent fiscal policies and IMF negotiations, which appeared more peaceful than recent demonstrations by pensioners and football fans that resulted in injuries.
Milei has stated that the new loan will enable the government to repay debts to the central bank and address the persistent issue of inflation in Argentina, which has one of the highest rates globally. Since Milei’s inauguration in December 2023, public spending cuts have led to a noticeable decrease in inflation, which has dropped from 211% year-on-year to 66% currently, though this has coincided with rising poverty levels.
Discussions with the IMF began in November regarding a new “extended fund facility” (EFF) intended to replace the prior arrangement established in 2022. The EFF aims to refinance Argentina’s debt, facilitating the repayment of the record $44 billion loan that was negotiated under former president Mauricio Macri in 2018, the largest ever extended by the IMF.
In summary, Argentina’s Congress has authorized President Javier Milei to negotiate a new IMF loan, vital for addressing the country’s economic challenges, including debt payments and inflation management. Despite widespread protests against his austerity measures, Milei’s government aims to stabilize the economy by leveraging international financial support. The ongoing discussions with the IMF and the recent reduction in inflation reflect the complexities of Argentina’s financial landscape as it seeks to navigate economic recovery while addressing rising poverty levels.
Original Source: www.france24.com
