To put it in football terms, at the economic team’s midday meeting with the IMF on Monday, there were no starting players.
But the substitutes or the technical staff of both the economic team and the Fund stopped at various aspects of the state of the public accounts so that next Friday Minister Hernán Lacunza and Central President Guido Sandleris will go out on the pitch: they will seek to convince the head of the Fund’s Western Hemisphere, Alejandro Werner, of the need for the pending disbursement.
Judging by the maturity schedule, Argentina does not have much room to do without the IMF’s US$5.4 billion due in September.
No one ventures deeper than the waters we live in, but the commitments imply, at least this week, some US$ 900 million in dollar letters that are in the hands of the private sector (see more information on this page).
The meeting discussed cuts in spending that, judging by the technicians themselves, the government paid dearly in electoral terms.
That is why it has sought the shelter of measures such as the elimination of VAT on products from the basic basket, an extra bonus for state-owned companies and the freezing of gasoline, to name a few policy tools, which were not in the Fund’s manuals.
All in order to prevent more people from being left out in the open. Sources close to the Palacio de Hacienda say that “Argentina did not cut itself and the measures were taken in line with the Fund itself.
And just yesterday it transpired that there would have been a wink from the head of the mission in Argentina, Roberto Cardarelli, about the highly probable recommendation to the board of the September disbursement.
It remains to be seen if that is an opinion shared with Alejandro Werner. This top executive of the Fund is a doctoral economist at the prestigious MIT in the United States.
Werner has a birth certificate in Córdoba and his father, accountant Manuel “Lito” Werner, was chief of staff to José Ber Gelbard, Perón’s minister in his third presidency. With the military dictatorship, the Werner family had to go into exile in Mexico.
Yesterday’s meeting was attended by the Vice Minister of Finance, Sebastian Katz, the Secretary of Finance, Rodrigo Pena and the Secretary of Finance, Santiago Bausili. In the meantime, Minister Hernán Lacunza participated in the national cabinet meeting at the Casa Rosada.
Minister Lacunza had already pointed out on Saturday: “We comply with all the agreement signed with the IMF and there is no reason why the planned disbursement should not be delivered.
According to information from the Treasury Palace, a primary surplus of $4.293 billion was recorded in July.
However, those same tables indicate that in July the financial red (including debt payment) grew 24.8%, which represented a deficit of $77.867 billion.
The accumulated result between January and July, in the first seven months of the year, showed a primary surplus of $34,514 million and a financial deficit of $365,069 million.
“The annual goal adjusted for the agreement with the Ministry of Finance will allow the year to close with an overcompliance of $5.197 billion,” they explained to the Fund’s technicians.
Regarding the fiscal impact of the measures announced last week, it was noted that they cost $59.986 million.
According to the reasoning of Lacunza’s team, this figure will be almost compensated with additional income in the collection for a total of $54,841, which implies a negative difference of $5,146 million, insignificant if measured with the GDP: it represents 0.02% of the Product.