President Javier Milei signed an executive decree to expedite a new IMF deal for Argentina, bypassing congressional approval. The government argues this measure is necessary to mitigate the economic crisis by repaying debts. Negotiations are ongoing, but the new agreement is anticipated to conclude by end of April, marking Argentina’s 23rd deal with the IMF.
On Monday, President Javier Milei enacted an emergency executive decree to facilitate a renewed agreement between Argentina and the International Monetary Fund (IMF), indicating that a staff-level consensus is imminent. Legally, any new IMF programme requires congressional approval. However, unlike his predecessor’s approach to seeking consensus through lawmaking, Milei’s decree will automatically take effect unless both chambers of Congress reject it. A majority approval from just one chamber will also solidify the decree into law.
The government contends that this funding will be allocated to settle the Central Bank’s debt to the Treasury, thereby reducing the nation’s overall debt burden. They argue that the severe economic circumstances justify this borrowing via a decree rather than the standard legislative approval process. Negotiations with the IMF remain ongoing, yet the executive order indicates significant progress towards finalizing a satisfactory agreement.
Economy Minister Luis Caputo recently noted that his team, in cooperation with IMF staff, has already reached an agreement regarding the sum and details of the new programme, which is pending approval from the fund’s executive board. He conveyed confidence that the arrangement would be concluded by the end of April. As Argentina holds the distinction of being the IMF’s largest debtor nation, the upcoming agreement would mark its 23rd, the highest number of agreements with any country and pivotal for lifting capital controls.
The new programme is essential for attracting necessary investments, as the lifting of capital controls would open the doors to better financial inflow. IMF spokesperson Julie Kozack stated that congressional support is crucial for the programme’s success but emphasized that the process remains governed by local law. She remarked, “Strong ownership and broad support are key to the programme’s success. Here I want to emphasize, though, that securing congressional support is a decision of the authorities as legislated in Argentine domestic law.”
President Javier Milei’s decree aligns with Argentina’s urgent need for an IMF programme, paving the way for financial restructuring. The government’s justification for bypassing standard legislative approval highlights the country’s pressing economic challenges. With negotiations advancing and significant congressional backing required, Argentina is positioned to stabilize its economic outlook through this new arrangement with the IMF.
Original Source: www.batimes.com.ar
