Argentina’s Congress Approves New IMF Loan for President Milei
Argentina’s Congress approved President Javier Milei’s request for a new IMF loan, amidst protests against austerity measures. The vote enables Milei to enhance foreign reserves and cover debts while aiming to combat high inflation. Despite lower inflation rates following spending cuts, public discontent grows as poverty rises.
On Wednesday, Argentina’s Congress approved President Javier Milei’s request to negotiate a new loan agreement with the International Monetary Fund (IMF), adding to the existing $44 billion debt the country owes. This new 10-year loan aims to bolster the central bank’s foreign currency reserves and address upcoming debt repayments, although the loan amount remains unspecified.
The authorization procedures follow a 2021 law requiring the president to gain approval from Congress to access IMF funds. With a vote tally of 129 in favor, 108 against, and six abstentions in the lower house, Milei can now proceed with the negotiations. While his libertarian party holds a minority position in Congress, it has successfully formed alliances to advance its economic reforms.
The vote drew significant public opposition, with thousands staging protests against Milei’s austerity policies and the IMF negotiations. Rodolfo Celayeta, a 73-year-old retiree among demonstrators, expressed frustration, stating, “Every time something is agreed with the IMF, things get worse for us.” Although the protests were largely peaceful, there were minor incidents resulting in injuries, prompting a notable security presence of around 2,000 officers.
The newly negotiated IMF loan is expected to assist the government in settling debts owed to the central bank while aiming to “exterminate” inflation, which has plagued the nation. Since taking office in December 2023, Milei’s administration has implemented substantial public spending cuts, leading to a reduction in inflation rates from 211 percent year-on-year at the year’s close to 66 percent currently, despite rising poverty levels.
Discussions with the IMF began in November for a new “extended fund facility” (EFF) intended to replace a previous agreement. This EFF aims to help manage Argentina’s substantial debt obligations, focusing on the unprecedented $44 billion loan secured from the IMF in 2018 under center-right president Mauricio Macri.
In summary, President Javier Milei secured congressional approval to negotiate a new IMF loan, amidst ongoing public protests against austerity measures. This agreement aims to enhance Argentina’s foreign reserve capabilities and address debt obligations. As Milei’s government strives to control inflation, the socio-economic impacts of austerity continue to raise concerns among the populace, indicating a complex relationship between economic policy and public welfare.
Original Source: www.sanfordherald.com
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