Argentina’s Congress Approves New IMF Loan Negotiations Under Milei
Argentina’s Congress has authorized President Javier Milei to negotiate a new loan from the IMF to enhance foreign currency reserves and manage debt payments. The decision follows Milei’s request and political maneuvering amid public protests against austerity. The loan seeks to address the country’s severe inflation and fiscal challenges while heightening scrutiny from citizens.
On Wednesday, Argentina’s Congress permitted President Javier Milei to negotiate a new loan agreement with the International Monetary Fund (IMF), adding to the existing $44 billion owed. On March 11, Milei requested lawmakers’ approval for a new 10-year loan aimed at enhancing the central bank’s foreign currency reserves and addressing impending debt payments. While the specific loan amount has yet to be disclosed, it signifies a key step for South America’s second-largest economy.
A 2021 law mandates that Argentina’s president obtain authorization from both congressional houses for IMF funding, yet only one house’s support is necessary to proceed. The lower house, known as the Chamber of Deputies, voted with 129 in favor, 108 against, and six abstentions, granting Milei the authority to finalize the agreement. Despite his libertarian party’s minority status, Milei has successfully formed temporary alliances in Congress to advance his budget-reducing aspirations.
The vote transpired amidst significant public unrest, as thousands protested near the legislature against Milei’s austerity measures and IMF negotiations. Demonstrator Rodolfo Celayeta expressed, “Every time something is agreed with the IMF, things get worse for us.” Last week, demonstrators faced police violence, resulting in injuries, though Wednesday’s protests were more subdued.
Milei asserts that the new IMF loan will facilitate debt repayment to the central bank and address Argentina’s chronic inflation problem. The country boasts one of the world’s highest inflation rates. Following his assumption of office in December 2023 and subsequent public spending cuts, price increases have notably decelerated, but poverty rates have surged. Inflation has dropped from 211% year-on-year at the end of 2023 to approximately 66% currently.
Discussions regarding a new “extended fund facility” (EFF) with the IMF commenced in November, seeking to replace a previous agreement active since 2022. The EFF aims to refinance Argentina’s debt and manage the repayment of the $44 billion loan secured by former President Mauricio Macri in 2018, marking the largest IMF loan in history.
In summary, the approval by Argentina’s Congress for President Javier Milei to negotiate an additional loan with the IMF marks a critical juncture for the nation’s financial strategy. Despite substantial public opposition, this decision aims to bolster the country’s reserves and combat inflation—a significant economic concern. As IMF negotiations progress, the government faces immense pressure to balance austerity measures with the welfare of its citizens.
Original Source: www.bryantimes.com
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