When Argentina’s president faces an IMF bailout
Argentina’s President Mauricio Macri is under pressure to come up with a plan to avoid the country’s biggest financial crisis in a decade.
His advisers say he should do it before the end of this month, with the IMF and the World Bank set to decide on a loan agreement on July 12.
But the country needs the support of a European Union (EU) bailout package as well as help from the International Monetary Fund (IMF) to avoid default on a €2.6bn ($2.7bn) debt payment to the IMF.
That money will have to be paid back in full before the first of this year.
The IMF has so far provided only a few million dollars to Argentina.
The rest will be used to support the country in its efforts to recover from the 2008 financial crisis.
The country is expected to have a new budget next month that will be largely financed by IMF money.
A new IMF-backed loan to Argentina could be the last in the current round of lending, with both sides saying it would be difficult to do more without a commitment to repay it.
“We are ready to do it,” said Fernando Ponce, Macri’s former finance minister.
“But we need to see what will happen from the IMF.”
Argentina has not been allowed to declare a debt default since the early 1980s, and its finances are in dire straits.
The debt has reached almost €50bn ($53bn) and the economy is shrinking at the fastest pace in decades.
The economy grew by just 4.3 per cent in the first quarter of 2017, a sharp drop from the 5.7 per cent growth in the same quarter a year earlier.
The government has promised to repay some of the loans but has not committed to repay any more.
Its debts to the International Bank for Reconstruction and Development (IBRD) are almost $5.5bn.
The International Monetary Commission (IMC), which has the power to cut off a country’s access to the international capital markets, has said it will not extend a loan to the government.
The ECB and the European Central Bank (ECB) have said they will not provide any support for Argentina if it does not act before July 12 to make a repayment of its debt.
“The IMF has been very helpful in Argentina in helping to address the fiscal and financial challenges we face,” IMF chief Christine Lagarde said in a statement.
Ms Lagarde and other IMF officials have been urging Argentina to act before its creditors, who have been trying to get the country to repay the debt. “
At the same time, Argentina must do its share to return to sustainable economic growth, to address its debt, and to return the economy to a path of sustainable growth.”
Ms Lagarde and other IMF officials have been urging Argentina to act before its creditors, who have been trying to get the country to repay the debt.
But many of the countrys largest banks have been unwilling to lend to Argentina because of the high debt, especially debt to the oil and gas sector.
Ms Lagardard said that “a country that has already defaulted in its previous bailout needs to do its part now to make sure the IMF doesn’t step in and make any loans it might.”
The IMF said on Monday that it had “serious concerns” about the country continuing to fail to pay its IMF debt.
The bank has also said it would review its support for the country if it failed to comply with a debt restructuring agreement.
“There are concerns that we may need to consider the possible withdrawal of support if Argentina fails to comply fully with IMF debt restructuring obligations, as we have previously said,” the IMF said in its statement.
The new IMF bailout package is not a new one for Argentina.
In 2015, the IMF agreed to support Argentina’s debt restructuring and its plan to restructure its budget.
But after the debt restructuring, the country is still not paying back its debt to foreign creditors.
The latest IMF statement also said that Argentina needs to increase its use of a “debt management mechanism” to avoid future defaults.
The use of this mechanism is important because it would allow Argentina to avoid a default in the future.
“A default of Argentina could have a negative impact on the economy,” the statement said.
The president of Argentina, Mauricio Fernandez, has been struggling to get through the summer with the new bailout.
But it remains unclear how much of his support he can get from the new IMF and how much support he will need from other countries.
“Macri is facing a very difficult situation,” said Jean-Marc Olliver, the head of the IMF’s Argentine division.
“He is facing serious political pressures and financial pressures, and he has no choice but to go with the best solution to avoid this crisis.”
The latest statement by the IMF was released ahead of a meeting between Macri and its leaders on Monday in Washington.
“This will be the final meeting of the working group on the recapitalisation of Argentina,” said Mr Ollivers statement.