Argentina’s Congress Approves New IMF Loan for President Milei

Argentina’s Congress has authorized President Javier Milei to negotiate a new IMF loan to supplement the existing $44 billion debt. Despite protests against austerity measures, the move is viewed as critical for stabilizing the economy and addressing inflation, which has significantly decreased since Milei took office. The EFF will facilitate debt refinancing for Argentina’s historical obligations to the IMF.

Argentina’s Congress has granted President Javier Milei approval to negotiate a new loan agreement with the International Monetary Fund (IMF), in addition to the existing $44 billion debt. On March 11, Milei requested authorization for a new 10-year loan aimed at bolstering the central bank’s foreign currency reserves and covering imminent debt payments. The specifics of the proposed loan amount have not yet been made public.

As per a 2021 regulation, the approval for IMF funds requires consent from both houses of Congress; however, only one house’s support is necessary to proceed. In the Chamber of Deputies, Milei secured 129 affirmative votes against 108 opposing votes, with six abstentions. This outcome allows him to move forward with finalizing the agreement despite his libertarian party being in the minority.

The vote occurred amidst significant protests outside the legislature, with thousands objecting to Milei’s austerity measures and IMF negotiations. The demonstrations were notably larger yet more subdued compared to previous ones, which had resulted in injuries to 45 individuals from clashes involving pensioners and football fans.

Milei believes that the new IMF loan will enable the government to repay debts to the central bank while also aiming to “exterminate” inflation, which remains a critical issue in the country. Despite holding one of the highest inflation rates globally, since his inauguration in December 2023, Milei’s austerity measures have resulted in a decline of inflation from 211 percent year-on-year to 66 percent currently, albeit with a rise in poverty levels.

The Argentine government has been negotiating with the IMF since November regarding a new “extended fund facility” (EFF) that would substitute a previous agreement. This EFF aims to facilitate the refinancing of Argentina’s debt, initially intended to address the substantial $44 billion loan arranged by former President Mauricio Macri in 2018, marking it as the largest loan ever provided by the IMF.

In conclusion, President Javier Milei has successfully obtained congressional approval to negotiate a new loan from the IMF, aiming to strengthen Argentina’s financial standing amidst high inflation rates. The decision occurs against a backdrop of public dissent regarding austerity measures. While inflation has notably decreased since his administration’s inception, the associated increase in poverty poses ongoing challenges for Milei’s administration as discussions continue with the IMF regarding debt refinancing solutions.

Original Source: www.france24.com