Argentine candidate Alberto Fernandez takes aim at IMF deal: 'loans are financing capital flight'
Alberto Fernández, the main challenger to incumbent President Mauricio Macri in Argentina's elections this October, said today that if elected he would seek to "rework" Macri's bailout deal with the International Monetary Fund (IMF), calling it "harmful."
Fernández, whose center-left Front for All (with running mate and former President Cristina Kirchner) is leading in most polls, met with IMF executives Alejandro Werner and Trevor Alleyne today to discuss his "deep concern" over the $56.3 billion bailout negotiated by Macri in 2018.
"I conveyed to the IMF our willingness to rework the agreements without demanding more from our people," Fernández said. "We seek to stabilize the economy in order to grow as a necessary condition to paying our debts."
Centrist candidate Roberto Lavagna, currently polling in third place, reiterated Fernández's concerns to Werner and Alleyne this afternoon.
International Macri Fund
Fernández has accused the IMF of "financing Macri's campaign by indebting Argentina."
The bailout is the largest in IMF history and makes up 61% of its loan portfolio - leading local critics to refer to the IMF as the "International Macri Fund."
Fernández noted moreover that of the $39 billion disbursed so far, $30 billion were used to finance speculative capital flight.
"Article VI of the IMF states that 'no member may use the general resources of the Fund to face capital flight'," he pointed out.
"The objectives that were set at the time of granting the loan have been absolutely distorted."
From bubble to bailout
Macri turned to the IMF - who had supported his policies - when a $60 billion carry-trade debt bubble known locally as the "financial bicycle" collapsed in April 2018.
The crisis cut off Argentina's access to foreign credit markets, and forced the central bank to raise interest rates. The ensuing recession - the second since Macri took office in 2015 - has led to a 5.8% fall in GDP, a 24.6% collapse in fixed investment, and 261,000 registered job losses.
Inflation has meanwhile risen to 57.4% - the highest since 1991.
At: https://money.usnews.com/investing/news/articles/2019-06-27/argentine-presidential-candidate-alberto-fernandez-takes-aim-at-imf-deal
Argentine opposition leader Alberto Fernández (right) with IMF Western Hemisphere head Alejandro Werner and IMF Argentina division head Trevor Alleyne (left) during their meeting in Buenos Aires earlier today.
Fernández believes the IMF has been financing Macri's campaign at Trump's behest, leaving Argentines to foot the bill.
Of $39 billion borrowed from the IMF so far, moreover, 77% have been used to finance speculative capital flight - in direct violation of the IMF's own rules.
