Argentina’s Congress Endorses Javier Milei’s IMF Loan Negotiations
Argentina’s Congress has granted President Javier Milei approval to negotiate a new loan from the IMF aimed at enhancing foreign currency reserves and addressing debt obligations. The loan’s specifics are yet undisclosed, but supporters believe it will assist in combating inflation. Protests have erupted against austerity measures associated with these negotiations, highlighting social tensions amid economic reforms.
On Wednesday, Argentina’s Congress approved President Javier Milei’s request for authorization to negotiate a new loan with the International Monetary Fund (IMF). This comes as Argentina grapples with a significant debt to the IMF amounting to $44 billion. The proposed loan aims to bolster the central bank’s foreign currency reserves and address upcoming debt obligations, although the specific loan amount remains undisclosed.
Under existing legislation, Argentine presidents must seek Congressional approval for IMF loans. With 129 votes in favor and 108 against, Milei secured the necessary support from the lower house, allowing him to proceed with finalizing the agreement. Despite his party’s minority status, Milei’s administration has managed to create coalitions to advance its fiscal policies.
Protests erupted outside the legislature as demonstrators voiced their opposition to Milei’s austerity measures and the impending IMF negotiations. While the protests were larger than previous ones, they remained relatively peaceful, contrasting with last week’s violent confrontations that left numerous individuals injured.
Milei asserts that the new IMF agreement will facilitate the repayment of debts to the central bank and assist in combatting inflation, which remains a persistent issue in Argentina. His administration’s fiscal adjustments since taking office have led to a significant reduction in the inflation rate, decreasing from 211 percent at the end of 2023 to 66 percent currently, although this has resulted in increased poverty levels.
Negotiations for this new financing arrangement, termed an “extended fund facility,” began last November to replace an earlier agreement that had been in place since 2022. This facility aims to refinance the substantial debt incurred during the tenure of former president Mauricio Macri, whose administration negotiated the largest IMF loan in history.
In summary, President Javier Milei has successfully gained Congressional approval for a new loan arrangement with the IMF, intended to strengthen Argentina’s financial position. Despite facing public dissent over austerity measures, Milei’s government believes that this loan can aid in reducing inflation and managing national debt obligations. The ongoing negotiations indicate a critical phase in Argentina’s economic strategy following significant past financial challenges.
Original Source: www.rfi.fr
