The government prolongs negotiations with the Paris Club, and Massa postpones his trip to November

Massa and his team, in a meeting with the directors of the Paris Club in Washington, last week

The Ministry of Economy will prolong negotiations with Paris ClubWho confirm that they are advanced, and the Minister Serge Massa Finally, he can travel to the French capital to finalize the restructuring agreement with the union of creditor countries during the month of November.

The head of the Treasury Palace had confirmed after the meeting in Washington last week with the head of that creditor body Emmanuel Mullen – Also the French Treasury Minister – that the possibility of reaching a technical agreement to amend the terms of payment of outstanding debts with the Paris Club is near.

An initial date even risked Massa traveling to Paris to sign that agreement, between October 27 and 28. They stressed that technical negotiations will continue in any case during the coming days, and in close proximity to the Minister of Economy Infobae The flight will be postponed until at least the first week of November.

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Massa is seeking to close negotiations and restructure debt with the Paris Club as a third step in the process of re-discussing the foreign currency commitments being undertaken by the Alberto Fernandez government between primarily private sector bondholders and then the International Monetary Fund.

Massa with Emmanuel Moulin, French Chancellor of the Exchequer and President of the Paris Club
Massa with Emmanuel Moulin, French Chancellor of the Exchequer and President of the Paris Club

More than half of Argentina’s debt to the Paris Club is concentrated in two countries: Germany (37%) and Japan (22%). This is followed by the Netherlands (about 8%), Spain (6.68%), Italy (6.29%) and the United States (6.28%).

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This is a pending balance for renegotiation 2 billion dollars That the Argentine state has accumulated in recent years and has not been paid according to the agreement signed by the minister at the time Axel Kisilo In 2014. Alberto Fernandez’s government halted payments to the union of creditor nations and called for restructuring.

In 2014, Christina Kirchner’s government signed a signed agreement that includes the return of $9.69 billion In five years, to May 2019. Altogether, about 5 billion dollars The capital was accrued while the remainder (approximately $4,700 million) was generated from interest on these liabilities and fines accumulated over the years.

The exact copy signed with the Paris Club, however, provided a window for an additional two years to cancel those outstanding balances, albeit at a significant additional cost. The interest for which this amount has been updated has become 9% annually, double its rate through 2019.

Small table: Massa and the Paris Club held their first meeting in Washington and will seek to close an agreement in November
Small table: Massa and the Paris Club held their first meeting in Washington and will seek to close an agreement in November

Currently, the Paris Club consists of Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, South Korea, the Netherlands, Norway, Russia, Spain, Sweden and Switzerland. . , the United Kingdom and the United States, which account for nearly 60% of global GDP.

Before resigning from the Palacio de Hacienda, Martin Guzman He claimed to have advanced in a technical understanding with that organization based in the French capital to obtain new terms and a new interest rate of less than 9% per year that is still in effect. Massa also confirmed that he would seek an agreement to repay $2,000 million but would wait for IMF support to move forward.

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There were several references to this effect in the agency’s latest staff report released after discussion in the board of directors about reviewing the targets in June and September. “Continuous efforts in good faith, from all parties, are needed to ensure a successful restructuring of Paris Club debt. Ensuring that international partners fulfill their financing commitments is critical to supporting the main objectives of the programme.” Kristalina Georgiev.

In an attached letter from Sergio Chodos Within the staff report released on Friday, the official confirmed: “Our authorities have resumed negotiations with the Paris Club and our goal is to reach an agreement in the coming months, based on a repayment schedule consistent with our ability to repay and debt sustainability.”

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Aileen Morales

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

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