On 7 May, Argentina’s President Alberto Fernández declared that “no creditor will be given priority over the interests of Argentines”.
Analysis:
The timing of President Fernández’s comments is provocative: two days later, he began a tour of European countries, where he will be seeking support for his government’s debt negotiations with the International Monetary Fund (IMF) on the one hand, and attempting to secure a renegotiation of Argentina’s debt with the Paris Club group of creditor nations on the other. Goodwill will be needed on both sides to achieve a positive outcome, but Fernández’s comments at home risk getting these discussions off to a bad start.
- President Fernández said that “nothing worries me more than the hunger of the Argentine population” and “creditors will have to wait” while speaking at the ‘Argentina against hunger’ federal council on 7 May, during which he announced a new subsidy to help feed children. The Fernández government faces the multifaceted challenge of addressing rising poverty levels and high inflation – annual inflation stood at 42.6% in March – while renegotiating its outstanding US$45bn debt with the IMF, which it maintains it is currently unable to pay.
- Argentina also owes the Paris Club a US$2.4bn repayment by the end of May, as per the terms of a deal negotiated during the presidency (2007-2015) of the now-vice president, Cristina Fernández. There is a 60-day grace period, but if the Argentine government has not paid up or sealed a renegotiation deal by 30 July, it will officially have defaulted on its debt to the Paris Club.
- Yesterday (9 May), President Fernández arrived in Portugal, accompanied by Economy Minister Martín Guzmán and Foreign Minister Felipe Solá, the first stop of their European tour during which they will meet with their European peers and seek support for the debt renegotiations with both the IMF and the Paris Club. The debt repayment terms to which Argentina is willing to agree is a source of friction within the government at home, adding to the complexity of these negotiations.
Looking Ahead: After Portugal, the Argentine delegation will travel to Spain, France, Italy – all members of the Paris Club – and the Vatican.
