Georgieva said she had a “productive” meeting with Bataki and supported the adjustment

Georgieva said she had a “productive” meeting with Bataki and supported the adjustment

The economy minister had a marathon agenda of meetings in the North American capital to gain more political leverage to contain the crisis.

Minister of Economy Silvina Batakis with Managing Director of International Monetary Fund Kristalina Georgieva.
Minister of Economy Silvina Batakis with Managing Director of International Monetary Fund Kristalina Georgieva.

Washington. A “productive” meeting. At a critical moment for Argentina’s economy, International Monetary Fund (IMF) Managing Director Kristalina Georgieva and Economy Minister Silvina Batakis held their first face-to-face meeting in Washington, which lasted 20 minutes. The meeting, which, beyond the official presentation, served to discuss the country’s situation and outline the future of Argentina’s economic program, which has been damaged and uncertain by the flight of the dollar, and the debate on defining new measures in the government.

Minister of Economy Silvina Batakis with Managing Director of International Monetary Fund Kristalina Georgieva.
Minister of Economy Silvina Batakis with Managing Director of International Monetary Fund Kristalina Georgieva.

“Another productive meeting with Minister Bataki. We welcome your initial efforts to strengthen fiscal sustainability and agree on the importance of implementing the program to address Argentina’s economic and social challenges,” Georgieva said on Twitter after the meeting, following the fund’s communication formalities. .

Goldfein, Batakis, Georgieva and Arguello, this Monday at the headquarters of the International Monetary Fund
Goldfein, Batakis, Georgieva and Arguello, this Monday at the headquarters of the International Monetary Fund

Batakis had a marathon schedule of meetings in Washington on Monday, his first full day on the job in the US capital. It began in the Treasury Department, where he saw a crucial figure, David LiptonThe representative of the Biden administration, who knows the most about the Argentine economy, then went to the foundation, where he held a working lunch. personnel and a separate meeting with Georgieva. In the late afternoon, Batakis closed at the World Bank. He was always accompanied by the Argentine ambassador, Jorge Arguellohis deputy Carina Angelettiand embassy officials.

At every meeting, Batakis explained his first steps. He spent an hour with Lipton and other Treasury officials. “The interesting thing was that they knew him and listened to him, knew him and listened to him. The goal is accomplished,” Arguello told LA NACION. Batakis and the Argentine delegation spent about three hours at the foundation. There were two meetings. The meeting between Batakis, Georgieva, Arguello and Ilan Goldfein, director of the foundation’s Western Hemisphere department, lasted about an hour, with Batakis and Georgieva speaking alone for about 20 minutes. Then there was a working lunch with Goldfudge and the officials personnel who follow the Argentina program, Julie Kozak and Luis Cubedu.

Minister of Economy Silvina Batakis with World Bank Executive Director Axel van Trotzenburg.
Minister of Economy Silvina Batakis with World Bank Executive Director Axel van Trotzenburg.

Two meetings did so personnel And Georgieva heard Batakis’ plans firsthand and could begin to describe the future of the Argentine program. “They were satisfied,” the Ministry of Economy said. The balance of the Argentine delegation was that the first day of work in Washington was positive.

Batakis’ last stop of the day in Washington was the World Bank, where he met with the CEO. Axel van Trotzenburg. The World Bank, part of the government’s multilateral financing, announced that it has approved $200 million in funding to support innovation and technology for small and medium-sized companies. The World Bank has already committed $195 million over the past decade to support Argentina’s productive innovation agenda, the agency said in a statement.

Minister of Economy Silvina Batakis with Managing Director of International Monetary Fund Kristalina Georgieva.
Minister of Economy Silvina Batakis with Managing Director of International Monetary Fund Kristalina Georgieva.

“The World Bank is committed to a sustainable and just recovery in Argentina. The Bank is stepping up its support to the country throughout these challenging years, with a record level of financing: USD 2.1 billion in 2021 and a similar level expected in 2022 and 2023,” Van Trotzenburg said in a World Bank statement.

Refutation of Clavery-Caron

Without the political edge to change direction or introduce deep reforms, Batakis began testing relief with the fund to determine how he would contain the crisis and sustain the economic program. A discussion that is currently focused on the dollar and currency policy in Argentina. The government has been engaged in internal discussions since last week to decide whether to create a new exchange rate to increase the liquidation of exporters’ currencies and buy time. The market believes that the government will be forced to devalue the official dollar, which has fallen further behind the free dollar due to the current exchange rate in recent weeks.

Batakis arrived in Washington on Sunday afternoon in the sweltering heat with Deputy Minister Angeletti. Both marked a stark contrast to the delegation that accompanied Martin Guzmán on his last visit to the North American capital in April, when he came with his entire team, a spokesman and a communications director, and a personal secretary accompanying him. on his travels.international. Guzmán traveled to the spring meetings of the Foundation, the G20 and the latest revision of Argentina’s program.

On his first day in Washington, Batakis faced another problem: In an unprecedented and high-voltage political maneuver, the president of the Inter-American Development Bank (IDB). Mauricio Claver CaroneUnder investigation for an ethics scandal that could cost him his job, the $500 million loan to Argentina was conditional on program performance and commitments to the fund. The government was aware of the difficulties in unlocking these funds, but Claver-Carone made it public and wrestled an old arm with the ruling party.

05-11-2021 President of the Inter-American Development Bank (IDB) Mauricio Claver-Carone
05-11-2021 President of the Inter-American Development Bank (IDB) Mauricio Claver-Carone

The contract with the fund is already at the limit. The first review was met with a dose of accounting gimmicks, and economists, investors and businesspeople now expect the deal to change before the next quarterly review in September.

Before the recent turmoil in the markets, which pushed the parallel dollar above $300 and widened the gap with the official dollar, the fund had already said that the government should adjust public spending in real terms by 8% per year. The second semester to achieve the fiscal target, which set the primary fiscal deficit at 2.5% of GDP for the entire year. The government has reported that the deficit is currently over 4% per annum. The government also has a serious funding problem: the peso debt market has dried up, collections have not taken off as expected, and the central bank’s emission quota is virtually exhausted.

Shortly after taking office, Batakis already noted that the agreement with the fund will definitely undergo “certain modifications, because the world is constantly changing.” He cited the war in Ukraine, which has driven up the price of gas – which Argentina must import over the winter – about oil and food. The head of the Palacio de Hacienda and the foundation have both renewed their commitment to the program’s goals, but economists and investors deny there will be any changes. Q: What is the fund asking for in return for more flexibility?

Source: La Nacion

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