‘There is No Chance Argentina Will Default’

macriPhoto via Clarín

In an interview with Bloomberg TV, President Mauricio Macri rejected the possibility that Argentina will default on its debt payments, emphasizing on the “international support” the country has, “especially from the United States.” Moreover, he indicated that the new agreement with the IMF will be announced shortly and once again confirmed he will run for re-election.

Speaking of Argentina’s economic situation, Macri reiterated its current woes are mainly a result of external factors. “Surprisingly, things changed: oil prices rose, interest rates in the US were hiked, commercial tensions between China and the US ensued, and we had a drought that resulted in the loss of 30 percent of Argentina’s main production,” he said.

However, the President said he was confident about the Argentine economy making a swift recovery, along with the increase of exports, a historic harvest and a new, expanded agreement with the IMF. He highlighted the devaluation made the exchange rate competitive again, something that resulted in the exports increasing between 18 and 22 percent.

Although he declined to comment on details regarding the new agreement with the IMF, Macri did confirm it will involve “more money,” asides from the US $50 billion from the original one reached in June. In contrast with previous reports that indicated the extra amount would be close to US $20 billion, Argentine media is now reporting the sum will be between US $3 and $5 billion.

According to La Nación, the government estimates the sum is still likely to ensure Argentina’s ability to meet its financial obligations in 2019 and 2020. The newspaper also indicated part of the funds will also be disbursed sooner than what was determined in June.

“We are working with the IMF and will present an agreement that will bring confidence. It will involve clear monetary policy that will show where we are going. That is the most important part of the agreement. We will drastically reduce inflation and the need for external financial support,” Macri said.

In another passage of the interview, Macri was asked if the government’s economic measures are not equivalent to “political suicide,” even if they were aimed at doing “what the economy needs.” Macri replied he trusts “the level of maturity of the citizens” and that Argentina needs to “solve its problems.”

Moreover, Macri again confirmed he will seek a second term in next year’s presidential elections: “I am ready to run. We are building a new country, a new society based on the culture of work, one that knows we need to improve without tricks or shortcuts.”

“I’ve been telling the people the truth since day one. We are making a great effort and the results will be wonderful,” he added.

Towards the end of the interview, Macri was asked if he would back a military intervention in Venezuela. He rejected the option: “No, we need Venezuela to accept humanitary intervention,” he said.

Earlier in the day, Macri went to the Financial Times’ headquarters, where he had breakfast with representatives of banks and investment funds, as well as senior FT members. According to Clarín, FT Director for Latin America, John Moncure, gave Macri a warm welcome saying they were “delighted to have him” there. “This is a story that is being followed all over the world. It is important for the region and the world. And this is not the World Cup, we are all rooting for Argentina,” Moncure said.

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