WASHINGTON – The U.S. Treasury Department said the International Monetary Fund “must be prepared to withdraw if the country does not take the necessary measures” to be effective, a message with unique resonance for Argentina, whose program coincides with the Fund. It has been amended several times and has been heavily criticized in Washington. Although he has always had the support of Joe Biden’s White House.
In a speech a few days ago at the Center for Global Development, Jay Shambaugh, Treasury Under Secretary for International Affairs and collaborator with Treasury Secretary Janet Yellen, provided the Biden administration’s Treasury’s broadest, most detailed, and deepest view of the current state of the United States. The International Monetary Fund, which he considered an “invaluable and indispensable partner.” Champoux, one of the officials who, ex officio at the Treasury Department, participates in the discussions regarding Argentina, stressed the importance of the Fund helping countries “emerge from the crisis better than before,” which in this case Argentina has not yet happened.
Shambaugh began his speech by highlighting the importance of the International Monetary Fund, which he considered “essential,” and praised the importance of the International Monetary Fund. Work crew The agency’s response to the latest global crises, such as the coronavirus pandemic. He noted that the fund is “full of incredibly talented people” who can respond to current challenges. He added that it must play its role “in a consistent and strict manner, so that countries can make the necessary adjustments until their economies reach a solid base.”
The official identified three priorities for the multilateral organization: providing “robust and impartial” advice, helping to “develop the capabilities” of countries so they can create sustainable macroeconomic frameworks, and “creating and sustaining high-quality loan programmes.” Today, Argentina has become the main debtor country of the International Monetary Fund, and although Champoux did not mention Argentina or any other country specifically, Many saw in his words a message about the Treasury’s position on the Fund’s program with the country.
“The IMF should work closely with a country’s fiscal and monetary authorities to identify the macroeconomic reforms needed to achieve economic objectives. Once they do so, the IMF should remain steadfast in its advice,” said Champoux, who then made the point. “.But to be effective, the IMF must be prepared to withdraw if no country takes action. It is essential that programs do not limit themselves to providing funding. Financing must have a purpose and be accompanied by policies that restore stability to the country. A program that is not sufficiently modified will simply leave the country in the same or worse economic situation, often with more debt. If the program lacks credibility, it will not be able to attract new funding from the private sector.
Champoux said the IMF must “help countries emerge from the crisis better than before” and that its credibility is at stake. “We have to do everything we can to strengthen the IMF’s record, and that may mean making difficult decisions with members,” he insisted.
Although he did not mention Argentina, Champo’s letter appeared to offer insight into the current program with the country, and many economists familiar with the language of the Treasury Department, the International Monetary Fund and the link between the North American government and the organization saw veiled criticism. From the case of Argentina. Joe Biden’s government has supported Argentina before the Executive Board of the International Monetary Fund, but the Treasury Department has had a tougher stance than the White House, especially in recent months, in recent negotiations faced by the Minister of Economy and current presidential candidate of the Union for the Fatherland party. , Sergio Massa.
“‘Argentina’ is the unspoken word in strong criticisms of the IMF’s credit standards,” wrote Mark Sobel, who represented the North American government on the IMF’s board. “Reading between the lines, the Treasury does not approve of the continued refinancing of Argentina’s large IMF exposure, while ignoring the dire policies.” Although the United States acquiesced in this effort, the Treasury Department is clearly calling on the Fund to intensify its efforts after the next Argentine presidential elections, halt the permanent policy program, demand serious reforms, and, if not, stop supporting it, even if that is possible. He pointed out that this causes arrears to the International Monetary Fund and harms its financial health.
Gabriel Lopetegui, who represented Argentina before the board during Mauricio Macri’s government, praised Sobel’s analysis, leaving doubt on the social network.
Both the Fund and the Treasury understand that the current program with Argentina will be negotiated again with whoever wins the presidential election.
