Argentina’s new president ensures his team is already working with the IMF

The newly elected President of Argentina, Javier Miley, said this Monday that his team is working “on the recommendations” of the International Monetary Fund, to which the country owes about 42 billion euros.

“Our areas of work are consistent with the directions of the Fund,” Miley emphasized in an interview with Miter radio after International Monetary Fund (IMF) Managing Director Kristalina Georgieva congratulated the president-elect through social networks and social issues. expressed his readiness to work “closely” to develop a plan that “guarantees the macroeconomic stability” of the country.

In 2022, Argentina entered into an agreement with the IMF to refinance the $45 billion (about 41 billion euros) of debt that the South American country entered into in 2018 and which, with accumulated interest, now amounts to about $46 billion (about 42 billion euros). ).

The financing program includes meeting quarterly targets – the primary deficit, international reserves and money creation to finance the treasury – which Argentina will likely fail to meet by the end of this year.

“The government is withdrawing from the agreement because it has not met its fiscal target,” Miley recalled, as the primary deficit was forecast at 1.9% of GDP by the end of 2023, and Alberto Fernandez’s government will leave it at 2.9%. According to the new president.

Miley also recalled that Argentina committed not to use the Central Bank as a financing mechanism and ultimately financed the equivalent of 6% of GDP “directly and indirectly” through the monetary institution.

Considering the IMF stabilization program “dead,” the country must correct its course “as quickly as possible,” starting “with government reform, getting public accounts in order very quickly.”

“The adjustment must be made inexorably, the big difference is that the ‘caste’ made the people pay for it, and we will make the ‘caste’ and its associates pay for it,” he further said, referring to the ruling elite. in recent years.

Miley sought to reassure the fate of the education and public health sectors, recalling that they “cannot be privatized because they are under the jurisdiction of the provinces” since Argentina is a federal state, and also denouncing the “campaign of fear” against it. regarding this topic.

And he reiterated that his privatization program would be far-reaching: “Whatever can end up in the hands of the private sector will be in the hands of the private sector.”

The government official cited the example of oil giant YPF, which was nationalized in 2012 under the Peronist presidency of Cristina Kirchner, as well as state media such as the official Telam agency and TVP television, “which have become a propaganda machine,” he further condemned.

And he confirmed his desire to finally eliminate the Central Bank by “dollarizing” the economy.

“The currency will be the one that Argentines freely choose. Essentially, we will dollarize to get rid of the Central Bank”; – he said without providing a schedule.

Tempering some hopes and fears, the 53-year-old ultra-liberal economist assured that he would not immediately lift exchange controls, otherwise it would lead to hyperinflation.

The newly elected president also announced that he would travel “in the next few days” to the United States – Miami and New York – and then to Israel, but privately, before taking office.

Javier Miley of the La Libertad Avanza party won on Sunday with 55.69% (14.5 million votes) of the vote against 44.30% (11.5 million votes) received by Economy Minister Sergio Tomás Massa, after a voter turnout of 76%.

Miley is scheduled to be inaugurated as Argentina’s president for the next four years on December 10, succeeding Peronist Alberto Fernandez.