Argentina’s Congress Approves Milei’s Decree for IMF Agreement

Argentina’s Congress approved President Milei’s decree for a new IMF deal, allowing formal negotiations to begin. The vote was 129-108 in favor. Despite public protests and concerns over economic policies, the government argues that borrowing will alleviate debt. Argentina remains the largest debtor of the IMF with this deal marking a historical 23rd agreement.

Argentina’s lower house of Congress has sanctioned President Javier Milei’s emergency executive decree that supports a new agreement with the International Monetary Fund (IMF). This pivotal legislative decision allows for a formal announcement regarding the future terms of the program. The vote in the Chamber of Deputies was 129 in favor, 108 against, with six abstentions, which permits the decree to become law based on approval from only one congressional chamber.

The government’s authorization from Congress is a prerequisite for entering into a new IMF program, with negotiations with the lender currently ongoing. However, specific details about the new agreement remain undisclosed. Recently, there has been an increased expectation of modifications to currency policy under the impending program, resulting in the Argentine peso declining to its lowest value in over five months on the parallel market.

To address growing market concerns, Economy Minister Luis Caputo engaged with local media on Tuesday; however, he refrained from discussing any potential future policy changes. Outside the Congress, protests were taking place, with demonstrators facing armed security forces. Retired individuals have been voicing their grievances regarding diminished pensions, and last week, the protests turned violent as passionate football supporters joined the demonstrations.

The government’s firm response on March 12 resulted in numerous injuries and the detention of over 100 individuals. Milei’s administration contends that the IMF program, intended to settle the Central Bank’s obligations to the Treasury, will ultimately alleviate the nation’s debt burden. They assert that the extreme economic challenges faced by the country warrant immediate borrowing under a decree, bypassing comprehensive congressional approval.

Argentina holds the position of being the largest debtor to the IMF, and a new agreement would mark the 23rd such arrangement, setting a record for any nation.

In summary, Argentina’s Congress has ratified President Javier Milei’s decree supporting a new IMF deal, facilitating the initiation of negotiations and legislative processes. Despite ongoing protests over economic hardships, the government’s justification for the decree hinges on reducing national debt through IMF support. With details of the agreement yet to be revealed, Argentina’s status as the Fund’s largest debtor underscores the critical nature of this agreement for the nation’s financial future.

Original Source: batimes.com.ar