After more than a year of intensive consultations, an agreement has been reached between the International Monetary Fund (IMF) and Argentina on the debt burden of the South American country. Argentina owes more than $44 billion to the international fund. President Alberto Fernandez is relieved.
The deal is seen as a breakthrough in the tense relations between Argentina and the IMF. The loans are now being restructured, otherwise the country will not be able to repay them. With a payment deadline of over $700 million today, there was a lot at stake.
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The deal is intended, among other things, to stabilize the Argentine economy in order to eventually be able to repay the loan. According to the Argentine Minister of Economic Affairs Martín Guzmán, there will be no repayments for the next four years. Only then will the country officially begin to repay the huge debt. The Argentines will try to use the interim to create more jobs. Something will also be done about the enormous subsidies that the country provides to its population to pay the energy bills.
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Live on TV
“We had a debt that we could never pay off. It provided no prospect. Now we have a reasonable agreement that will allow us to grow to meet our obligations,” Argentina’s President Alberto Fernández said in a live address on national television. According to him, the agreement will not come at the expense of planned expenditures to get the economy back on track.
Argentina is – again – in a very serious economic crisis. The country is suffering from enormous inflation, which was more than 50 percent last year. Almost half of the population now lives below the poverty line. Unemployment is officially over 11 percent of the labor force, but it is probably much higher. It is anything but the first time Argentina has been in such a bad state. At the end of 2001, the country was still going through a very difficult and violent period when a massive bank run started. As many as 39 people were killed by excessive force.
The current debt was incurred under the previous president Mauricio Macri (2015-2019). The agreement still has to be submitted to the Argentine Congress and the management of the IMF.
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