"They have four slogans, they repeat them, and they don't even look at the country they are talking about. We can't negotiate again with these people", Cecilia Todesca described thus the meeting she, Alberto Fernández and Guillermo Nielsen held two weeks ago with IMF delegates.
The summary by Todesca was one of the few facts that reached those who are part of Fernández's inner circle before he became the Presidential candidate, and who are estranged from the media by orders of Santiago Cafiero, Fernandez's likely Chief of Staff.
In private, Todesca wanted to make clear that Alberto's statement, in which he cuts ties with the IMF, was the consequence of this failed negotiation and not of later internal debate. "They insist on asking for monetary restriction, there is not a single penny on the streets, and inflation has gone to the sky. They don't understand it is not working", she said in a dialogue with her colleagues.
The rough summit with Alejandro Werner and Roberto Carderalli, the IMF delegates, opened a conflict between Alberto and the organization which will be central to his administration if he finally wins the election in October. He can only find a way out using international support in rescheduling the payment due dates, which will be impossible to pay for every Presidential candidate, but without conditioning his economic policy. An ambitious goal.
"If there is support from Europe and the rest of the industrialized countries, (Donald) Trump may yield and kick the payments for the next term. Otherwise, the IMF will begin a conflict with its main debtor (Argentina), who represents 60% of its credits. It would be an unnecessary financial crisis and unpredictable in its scope". Such is the rumor in Fernandez's campaign headquarters, with some fear that it will keep growing.
The need for antagonizing is not college populism, but because they deem impossible the fact that the IMF specialists will accept another plan other than to lower the emission of money and hope for a rebound, even though this has not worked before. Only political pressure can force them to review their script.
This is what Alberto requested from Spain's Pedro Sánchez, with the hope that the message would reach the rest of Europe. It will also be the main topic in his meeting with Mexican President Andrés Manuel López Obrador, scheduled for September 23rd, as revealed by LPO. In his first meetings with world leaders, he is looking for aid with Kristalina Georgieva, who on October 4th will replace Christine Lagarde as head of the IMF.
The strategy became clear with later public statements by the former socialist José Luis Rodríguez Zapatero, who was also with Alberto in Madrid. "Spain, because of what it represents before international organisms, can offer its support so that Argentina does not enter a default situation", Zapatero declared.
Alberto Fernández and Pedro Sánchez
However, the weight comes from the governments, and particularly the US, who occupies 16.74% of the seats at the IMF and holds veto power on the most important decisions that require an 85% of the vote. Only lesser measures can be voted with 70%.
The decision of not sending 5,400 million dollars which Macri hoped for as a part of the agreement is because a majority of the seats were not willing to back up the turn after Fernández's encounter with Werner and Carderalli.
If Trump has always referred to Argentina as a friend, he never managed to make the country comply with his claim of eliminating the Chinese space base in Neuquén, opened during Cristina Kirchner's last term, and a provocation for the White House during their commercial war with China.
He demanded it at the G20 summit, and a group of Republican legislators called upon it during their visit to Argentina when they met with officials from the Ministry of Defense. Then, he informed in an official document that he had come to combat Chinese espionage in the region.
Last week, perhaps upset because IMF money was not coming through, Macri received the Chinese Minister of Defense to ratify his decision to keep the territory given by his predecessor.
Alberto already knows the price of keeping these towers in the Patagonia region, and maybe that is the reason why he has allowed the rumor of a lifesaving credit from Xi Jinping if Trump stretches the rope too much. It would not be free: the space base was the payment for the currency swap with China in 2014, which worked for Cristina to go through the default the vulture funds took her to the courts of New York.
To make things worse, Cristina and Sergio Massa, who are already working on a law to control external debt taken by Presidents, have been repeating that Lagarde is responsible for the financial downfall of the country because of the credit she approved and for not preventing most of that funds to leak out of Argentina.
In a TV interview on Sunday, Massa called the IMF "a loan shark", for lending last and collecting before the rest of the creditors. He opened a door for reprogramming the due dates with the IMF, even before the negotiation with the private bond holders that Minister of Economy Hernán Lacunza has been promising for the last two weeks.
Mauricio Macri and Donald Trump during the G-20 summit
The due dates calendar that awaits for the next President of Argentina is almost impossible to comply without acquiring new debt or a jump in the exports, which no one expects. During the first five months of 2020, the government must pay USD 23.400 million, most of it to private bond holders who bet on Macri at the beginning of his term, and who are now regretting their faith.
For the next three years, the IMF expects to collect most of the USD 57 billion disbursed during the last eighteen months of Macri's administration, plus interests. The numbers are shocking. They are known in the Ministry of Finance and are reviewed daily at Alberto's headquarters.
The negotiations with creditors are expected to begin on October 28. After what is expected to be a landslide victory, much needed to show a popular Government and with a comfortable majority in Congress.
The expectation, or need, is to reach December with a part of the debt rescheduled and to begin a frightening January in a healthier spirit. Alberto's economists are preparing for the end of gas price and VAT controls, which could be enough to prompt a new inflation crisis that should frighten any President, even a newly elected one.
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