Argentina faces the end of the term to pay off all its debt of 2.4 billion dollars with the Paris Club without having yet reached a refinancing agreement, but the government of Alberto Fernández hopes to advance with the negotiations so as not to reach a ceasefire. Payments.
The deadline expires this Monday and, if the debt is not paid, the forum of 22 countries could declare the South American nation in full default. Argentina’s main creditors in the Paris Club are Germany, Japan, the Netherlands, Spain and Italy.
According to the Argentine newspaper La Nación, the Paris Club will allow Argentina a 60-day extension in exchange for the government accepting control of the International Monetary Fund (IMF) in the coming weeks.
However, the Fernández government, which has repeatedly insisted that Argentina, in a severe recession for three years, is not in a position to face payments to the Paris Club and the International Monetary Fund (IMF), hopes to advance in negotiations that allow it to avoid a ‘default’ and for this it has recently added important support from world leaders.
Fernández and his Minister of Economy, Martín Guzmán, visited different European countries in recent days in search of a guarantee to be able to postpone the payment before the Paris Club and have support in the millionaire renegotiation for some 45,000 million dollars before the IMF.
On his tour he met, among others, with the presidents of Portugal, Marcelo Rebelo de Sousa; from the Government of Spain, Pedro Sánchez; from France, Emmanuel Macron, and from Italy, Sergio Mattarella, and the prime ministers of Portugal, António Costa, and from Italy, Mario Draghi. Fernández also met in Rome with the managing director of the Fund, Kristalina Georgieva, and had a videoconference with the German Chancellor, Angela Merkel, who, according to the Argentine Presidency, promised to “continue supporting Argentina to find a sustainable agreement with the IMF “.
The current debt that Argentina maintains with the Paris Club comes from a payment agreement sealed with that group in 2014, during the government of Cristina Fernández (2007-2015), when the maturities that the country had pending were renegotiated after having fallen into cessation of payments at the end of 2001.
The 2014 agreement established a five-year payment period, until May 2019, which could be extended for two more years. A year ago, the Fernández government asked the Paris Club to negotiate an extension of the maturity dates and a “significant” reduction in the interest rate, but until now no understanding has been reached.
The 2014 agreement establishes that if Argentina “fails to comply with the stipulated payments”, the forum “may publicly declare, as of 60 days” after the due date, that Argentina “is in default of payments with respect to its creditors of the Paris Club “.
The government has just restructured just over $ 100 billion with private creditors between August and last September, after its historic ninth sovereign default.
With information from Reuters and EFE.
