The Brazilian government asked the United States for help to broker Argentina’s renegotiation with the International Monetary Fund

US Treasury Secretary Janet Yellen shakes hands with Brazilian Finance Minister Fernando Haddad at the start of their bilateral talks on the sidelines of the meeting of G7 finance ministers and central bank governors in Niigata, Japan (Reuters)

Fernando HaddadBrazilian Minister of Economy and one of the highest authorities in the government Lola da Silvaasked the US Treasury Secretary, Janet Yellenthat management Joe Biden Mediates to help argentina renegotiate with International Monetary Fund (IMF) To overcome the deep economic crisis.

Dialogue in Japan Where there will be a meeting of ministers G7 that constitute the host country, USA, Germany, Canada, France, Italy and Great Britainto which he was invited Brazil. Haddad traveled on behalf of da Silva, who will attend next week.

Economy Minister Lilin expressed his position Concern about the economic crisis experienced by Argentina He suggested a new renegotiation with the International Monetary Fund that should have the support of the White House. “I brought this problem because Argentina is a very important country in the world and especially in South America. Secondly, because the solution for Argentina is to go through the International Monetary Fund. If Brazil and the United States are together in this support, it can make it easier for Argentina,” Haddad said. “.

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In this context, he announced that da Silva would raise the same message about Argentina when he travels to Hiroshima for the G7 summit in the next few days: “President Lula will come next week with the same concern; President Lula will come next week. I foresee what he himself will achieve, from Through word of mouth, for Argentina.”

Haddad revealed that the US Treasury Secretary was “surprised” by the request, but defended her position, stressing that with regard to Brazil. “It is necessary to solve this problem in Argentina”.

Haddad mediated after the president last week Alberto Fernandez and Minister of Economy Sergio Massa In Brasilia, he received signals of support from Lula himself and his political commitment to mediate with Financial assistance through BRICS. At that meeting, the Brazilian president confirmed that he had instructed Haddad to support Argentina in negotiations with the International Monetary Fund.

The primary objective is to change the objectives that were committed at the time of signing the existing Extended Facility Agreement. Brazil’s situation weighs heavily on the IMF’s board.

Brazilian President Luiz Inacio Lula da Silva, left, and his Argentine counterpart Alberto Fernandez pose for photographers at the Alvorada Palace, Tuesday, May 2, 2023, in Brasilia. (AP Photo/Gustavo Moreno)
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“I intend to help remove the knife that the International Monetary Fund is holding in Argentina’s neck. We know how Argentina got into debt and who lent it money, so they can’t be pressured like that. Argentina is a country that only wants growth and job creation,” Lula emphasized in front of Alberto Fernandez.

In addition, at the same meeting, da Silva promised that he would govern a pre-financing mechanism for exports to Argentina that would allow the central bank to protect its reserves. Argentina should not have its own dollars to finance imports from Brazil, but an offsetting system will be established and transactions will be made in local currencies.

Haddad with Economy Minister Sergio Massa

For this plan to work, the BRICS Bank was needed to act as the financial guarantor for imports from Brazil into Argentina. Brazil, Russia, India, China and South Africa are members of the multilateral forum. Lula has already reached out to XI Jinping so that the BRICS emergency fund can be used to help Argentina and also to Dilma Rousseff, who presides over New Development Bank.

The main snag is that the National Development Bank Act does not allow the emergency fund to be used by countries that are not full partners in the multilateral forum. To do this, Article 7 of the Regulation must be amended, a matter that will be discussed on May 30 and 31 at the Bank’s headquarters in Shanghai In a meeting that brings together finance ministers of member states, representatives of national governments, international organizations, bankers, business leaders and representatives of civil society organizations, and attended by Haddad and Sergio Massa.

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Read on:

Lula da Silva’s strong support for Alberto Fernandez: “I intend to help remove the IMF’s knife in Argentina’s neck”
Sergio Massa will travel to Shanghai to attend the BRICS Bank meeting with the aim of boosting reserves

Aileen Morales

"Beer nerd. Food fanatic. Alcohol scholar. Tv practitioner. Writer. Troublemaker. Falls down a lot."

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