The Argentine parliament finally approved a controversial debt payment agreement with the International Monetary Fund (IMF). After the Chamber of Deputies, the Senate of Buenos Aires (local time) also approved this Thursday the agreement to return 45,000 million dollars (40,700 million euros) to the IMF. The government of then-liberal head of state Mauricio Macri took out the record loan in 2018.
56 senators voted in favor of the agreement, 13 against and three abstained. The head of state Alberto Fernández, who does not have an absolute majority in Parliament, welcomed the approval. Argentina is now looking at a “very clear horizon,” he explained. Economy Minister Martín Guzmán stressed that unlike all previous agreements with the IMF, this time workers and pensioners would not be taxed.
Several hundred people demonstrated against the agreement in front of the Senate building. In doing so, they followed the call of the trade unions and leftist organizations.
Last week, the House of Representatives voted in favor of the payment agreement with a large majority of all parties. However, in the streets of Buenos Aires, several thousand people expressed their opposition to the agreement.
Argentina remembers a prolonged period of recession, which was partly related to the corona pandemic. Last year, however, economic life picked up again, with growth of 10.3 percent in the first eleven months. However, the rate of inflation was extremely high, more than 50 percent, and 33 percent inflation is expected by 2022. 40 percent of the Argentine population lives in poverty.
The new agreement with the IMF provides for the repayment of a loan granted in 2018. Argentina must gradually reduce its budget deficit from 3 percent in 2021 to 0.9 percent in 2024. According to the center-left government, social benefits and growth economic should not be affected. The IMF wishes to periodically review the progress of consolidation.
In addition, repayment of the loan will not begin until after a four-year grace period in 2026. It is expected to be completed in 2034. However, the effects of the Ukraine crisis on the world economy could make it difficult to implement the guidelines. of the IMF.