He specified that in the discussions within the body “There are reservations about freezing the overcharges”, mainly derived from the concern to preserve the strength that the Fund must maintain in the context of the international crisis. But he clarified that the issue “It is not resolved in one way or another” and added that “There was also support to do what the Fund does periodically, review the surcharges”. In this sense, he stated that “History would have to be defined as: it will continue.”
The Argentine Government proposed to the Fund the reduction of the surcharges that it applies in the payment of the debt for having exceeded 187% of its quota in the credit taken in 2018 by the management of Mauricio Macri. It should be noted that, if the body’s board of directors decided on this change, it would be for all countries and not for one in particular.
The Argentine quota of the IMF amounts to about 4,540 million dollars. The current loan with the country reaches 45,453 million dollars at present value, according to Joaquin Waldman by Ecolatina. 187.5% of the quota is equivalent to 8,490 million dollars, from which the country pays surcharges for US $ 36,963 million. The 2% surcharge is equivalent to US $ 738 million. In the Government they calculate that, Over time, the accumulation of these interests (the refinancing would be at least ten years) would imply an additional payment close to 10 billion dollars.
“Credible and useful”
Georgieva said that the negotiations between the IMF and the Argentine authorities aimed at reaching a new agreement continue “in a manner constructive “ and with “a commitment from both sides” to move forward. However, he did not specify when the understanding would be signed.
“I met with the minister (Martín) Guzmán, the commitment is to work constructively. We have to find a good point of agreement, where a program for Argentina is seen as credible and useful for the people and so they can support it “, indicated.
It should be remembered that yesterday, the president Alberto Fernandez He assured a group of important businessmen that the agreement is close to being achieved since the country faces maturities of almost 20,000 million dollars next year that are impossible to face. Precisely the businessmen stated that they were more “optimistic about the future with the IMF”
Georgieva began the conference by thanking the board of directors “for allowing him to speak” about the controversy surrounding his tenure over a World Bank report on China and for allowing him to continue to lead the body.
In this regard, he highlighted the joint work between the IMF and the World Bank during the pandemic. Regarding the report, he indicated that there was an investigation that resulted in the board’s ratification earlier this week, but admitted that the investigations will continue. He also emphasized the “excellence” of the Fund’s statistics.
He then stated that the world lives “Particularly challenging times” due to the inflation outlook, high indebtedness and the divergence in access to vaccines between countries. To illustrate the depth of the crisis, he noted that “By 2024 there will be 160 countries that will not have reached the levels of 2019.”
The official highlighted the “generosity” of developed countries to “voluntarily” transfer part of the new special drawing rights (SDR) that they received at the end of August to the nations that need it most.