He will agree to the agreement with Argentina

At that meeting on February 17, the Board assured Goldfjan that the actions of Kozack and Cubeddu (on behalf of IMF staff) had been approved; and that North America and Venezuela were given the green light to end the discussion of the entire agreement if the guidelines proposed at that meeting were respected. However, at the meeting, not all were positive and encouraging messages. It became clear that seeing many of the fund’s board members in the country was not the best. And that the Argentine economy always generates a lot of criticism among the direct representatives of the countries contributing to the International Monetary Fund, who speak and express themselves in Board meetings. This February meeting was no exception. Argentina knew in advance that the United States would be decisive. At the previous meeting of the Board of Directors, in December, the internal report prepared by the agency to analyze the outcome and legal aspects of the readiness agreement granted under the government of Mauricio Macri was discussed. US representatives had voted against the work done by the fund itself. In February, the United States again criticized the state of the Argentine economy and its unwillingness to accept the general guidelines of classic agreements with the Fund. Presumably, however, the US would support the agreement if it had the technical endorsement of the organization’s economists, but not much. And so it looks like it will be. The United States will vote in favor, critically, and without further comment on the content of the extended facilities. It is sufficient to agree to the agreement, since the United States owns 17% of the shares of the board of directors, which is enough to justify any special request. In this case it will not be necessary. The extended facilities to be approved do not have any special characteristics, nor do they confer any extraordinary service to the state. Only technical lines that accommodate the stable situation of the IMF. It will be unknown when the agreement will be voted on, the stance adopted by other countries that are highly critical of the country. In this sense, we will have to wait for the position of Japan, which insisted at the February meeting that the expanded facilities should demand to the fullest extent and compel Argentina to absorb its economy seriously; Including a short-term fiscal adjustment plan. This position is not new. Japan was already critical of the country in last year’s negotiations with the Paris Club, as it is one of the main creditors of Argentina (the second), with a total of 22.34% of commitments with that organization, through unpaid credits from the 1990s. These loans, granted to previously finance Japanese exports and the establishment of factories from that country in Argentina, were later renegotiated by Axel Kiselov as Minister of Economy, as part of the global debt of the Paris Club in 2014.

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Japan was one of the most important of the 2021 negotiations, to the point of demanding a cash payment of US$430 million from Argentina to close the agreement. That country indicated that it would not agree to sign without such a gesture, considering that Argentina would pay the liquidation of about 445 million US dollars to China over the past year in due course. Japan indicated that the Paris Club’s creditors could not be less than the Xi Jinping regime.

Although not a majority, the Asian country wields significant power on the IMF board, with 6.01% of the vote. The United States alone beats it with 16.74% and is better than Germany with 5.87%, France 4.85% and the United Kingdom with the same percentage.

Freddie Dawson

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