Argentina’s debt deal with IMF gets final legislative OK

Mar 17, 2022, 8:04 PM | Updated: 8:13 pm
People display an Argentine national flag during a protest outside Congress as senators prepare to ...

People display an Argentine national flag during a protest outside Congress as senators prepare to vote on a law to ratify the government’s agreement with the IMF to refinance some $45 billion in debt, in Buenos Aires, Argentina, Thursday, March 17, 2022. (AP Photo/Natacha Pisarenko)

(AP Photo/Natacha Pisarenko)

BUENOS AIRES, Argentina (AP) — Argentina’s Senate gave final legislative approval Thursday for President Alberto Fernández’s administration to refinance the government’s $45 billion debt with the International Monetary Fund and avoid a default.

The lawmakers voted 56 to 13, with three abstentions, to approve the deal signed with the IMF in early March. It was approved by the Chamber of Deputies last week, but it must still be approved by the IMF’s board.

While the approval helps the South American country avoid another default and economic turmoil, it may have created an insurmountable fracture between Fernández and his powerful vice president, former President Cristina Fernández, who has questioned the terms negotiated with the IMF.

The debate about refinancing has generated protests by Argentines angry over past IMF deals that they saw as disastrous for the country’s economic wellbeing. Demonstrators hurled rocks and set fires in front of the Congress building during protests last week.

Argentina assumed the debt in 2018 during the government of conservative President Mauricio Macri, but it failed to fully crush inflation or solve the country’s economic problems.

The current left-of-center government said the latest refinancing agreement reached with the IMF is essential to avoid a default on the loans and even greater problems for an economy scarred by past defaults and crises.

It would let Argentina delay repaying its debt until 2026, with payments continuing through 2034. Under the previous arrangement, the debt payments would have been concentrated in 2022 and 2023.

Leftist forces, including some members of the governing party close to the vice president, argued that some of its measures would worsen conditions for the 40% of Argentina’s people who are poor.

The government maintains the deal would not require any overhaul of the pension system or labor rules, though it says it would force increases in prices for gas, electricity and other public services..

“It is a debt that we would not have taken on,” said Fernández, the vice president, who is not related to the president. “I hear people say that the deal and obligations Argentina has assumed will mean adjustments. Where are the adjustments? Adjustments would have had to be made if we fell into default. In that situation we would have had no way out or escape.”

As a sign of her rejection of the deal, the vice president was absent for the vote, which was held under strong security measures.

Nora Cortiñas, one of the leaders of the emblematic Argentine human rights organization Mothers of Plaza Mayo, said: “They tell us there will be no adjustments and now the adjustments come. That this is not going to go up and that is not going to go up. But (prices) go up every day. How can it be that so many lies are told to the people?”

IMF spokesman Gerry Rice did not say Thursday when the agency’s board would vote on the deal, but estimated it would would not be that much longer.

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Argentina’s debt deal with IMF gets final legislative OK