As Ámbito was able to learn through different sources from the entourage that accompanies Alberto Fernández, from his conversations with officials, and between them and this medium, there are several edges on which the Chief Executive is pondering at this time. While carrying out an agenda of international issues linked to the impact of the war in Ukraine with the main European leaders, Alberto Fernández accumulates a set of decisions that seem to outline a kind of brand-new itinerary.
Lack of dollars, fiscal deficit, inflation, tariffs, and the open-air debate with Vice President Cristina Kirchner, are a set of conceptual elements that coexist in its ecosystem. The novelty is that, in some aspects, the President could face the last part of his mandate living with this universe.
One of the most important points is related to finances. The President considers at this time that it is a fundamental condition to strictly comply with the agreement with the IMF. For this, he will seek, in common agreement with the organization, a new round of talks on the main quantitative clauses of the agreement. There is a reason for these ideas: the lack of dollars. It has transpired among those who work with the President, that the president and Minister Martín Guzmán, are embarked on a particular mission: they think that, if they do not adopt a decision, Argentina could end up without the necessary dollars to make it to the end of the year. They recognize that the president is concerned, particularly with what could happen towards the third quarter of this year, when the liquidation of agriculture is reduced and to this will be added the exorbitant payment of energy imports.
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A hand from the IMF
The fact is that the Government seeks to frame these conversations in something that the IMF has already raised: the need for the agency to review all the programs that it has in force with different countries based on the economic impact that the war in Ukraine has had.
According to the sources, the President has spoken with the head of the IMF Kristalina Georgieva on this issue. In the entourage, they point out that the president trusts that, in the coming weeks, the IMF will bring Argentina closer to its intention to renegotiate the main quantitative clauses, especially those that the country will have problems complying with. The argument is that the war in Ukraine has changed everything. In this way, it would not be Argentina but the IMF that would request a renegotiation of the main conditions of the agreement. At the same time, Argentina would thus avoid requesting a “pardon” from the IMF.
Strictly speaking, the sources indicate that the president takes it as a possibility that could have a high chance of occurrence because, they maintain, in his view the problem is already launched and he awaits a short-term solution. It should be remembered that in the coming weeks the results of the IMF’s first evaluation of compliance with the goals set in the agreement for the first quarter will be known. But one of the main challenges for the Government is to meet the goal of accumulation of net international reserves for the next review in September. To reach the next goal, the Central Bank should accumulate US$4.1 billion against what was registered in December 2021. For that, it will have to buy foreign currency in the foreign exchange market.
In addition to the talks with the IMF, the elements that will be used so that the lack of dollars does not take place would be in the process of materializing. It will not only seek to appeal to the IMF’s resilience lines, to other lines of credit from other multilateral organizations, and eventually to support the jealous administration of the BCRA’s reserves.
Apart from the open dialogue table with the IMF, Alberto Fernández will fully support the electricity and gas tariff modification, as well as the policy of reducing the fiscal deficit and the monetary issue. Strictly speaking, the news is that not only are there no doubts about it but that the President considers it key to start lowering inflation. That is to say that, in the inflationary equation, Fernández understands that the Government must do its part (lower the fiscal deficit and the monetary issue) and businessmen must do theirs (price agreements, maximum prices, etc.), which, in his opinion, it would result in a reduction in inflation expectations.
Apart from the public hearings for the tariff modification that are taking place this week (and that the Government recognizes as non-binding), the idea is that this decision will be advanced because, in political terms, it does not exist, for the President, the possibility of going backward with that measure. According to the sources, Fernández considers that none of the officials who are part of the Energy area should oppose these adjustments. In any case, it transpired that the president would be willing to launch a request to “step aside” to those who do not agree with the idea and whose signature is necessary, in operational terms, to standardize the new rate schedules. The sources point out that in the presidential environment there is a certainty that the tariff structure cannot be sustained as it is.
Alberto Fernandez and Cristina Kirchner
On the political level, there is news. For the President, the sources say, there is a kind of harmonious coexistence with the idea of holding the debate on economic policies within the Front of All, from now on and for the remainder of his mandate. In this way, there would be no expiration date or need for a dialogue table or some immediate instance to sit down to discuss policies with Vice President Cristina Kirchner.
They admit in the environment of the President that he is always willing to consult her and receive her opinions, but ratifies her position as leader of the executive power, that is, the person who executes the decisions. They maintain that Fernández will seek to support the legislative projects that have been presented related to the economy, and that he also welcomes those that Kirchnerism has presented in recent weeks.