Argentina’s president calls for unity following Senate’s approval of IMF deal

By Bala Chambers

LONDON (AA) - Argentine President Alberto Fernandez spoke publicly on Friday following Senate approval for a deal to refinance the government's $45 billion debt with the International Monetary Fund (IMF).

The president acknowledged that Argentina is making "consolidated efforts" to resolve its debt with the multilateral lender.

"We first resolved the debt with private creditors, yesterday we began to resolve the debt with the IMF," said Fernandez during a speech in Tucuman, where a number of security agreements were signed.

He went on to stress that the debt with the IMF was a "debt that we inherited and that, surely, if we had been governing, we would not have taken. But they are problems that we have to solve."

Amid tensions among some lawmakers who rejected the IMF deal, arguing it would exacerbate social conditions for the poor, Fernandez called for unity, describing it as “time to work together”.

"We already had too many years to distance ourselves, to fight, to make a difference," he said, adding "there are issues where it no longer makes sense for us to continue marking those differences."

On Thursday Argentina's Senate approved the deal to refinance the government's $45 billion debt.

Following an extensive debate which began around 2 pm and ended after 11 pm local time, the IMF deal was passed after 56 senators voted in favor, 13 against and with three abstentions.

The deal will now need to be signed off by the IMF board of directors. Although a date has not yet been set, the board expected to meet in the coming days.

Economy Minister, Martin Guzman said the deal brings both stability and development to Argentina.

"Never has an agreement with the IMF had federal social and political support of such magnitude. For the first time in history, it passed through Congress and achieved a support level of 80%," he said on Twitter, referring to the support of "unions, the private sector, universities, social movements and civil society."

"Now, the next step is the approval of the IMF board. We look forward to multilateral support. It will bring more stability to Argentina, Latin America and the world," he added.

At the start of March, Argentina agreed to a staff-level deal with the multilateral lender, which the Chamber of Deputies approved last week - amid public protests and clashes outside Congress.

The new deal outlines a revised refinancing package, replacing Argentina's 2018 historic $57 billion loan aimed at tackling the deep economic crisis and which was received during the presidency of Mauricio Macri.

Overall the IMF deal garnered a broad level of support from the center-right opposition, despite some in the ruling center-left coalition opposing it - due to a host of targets oriented towards lowering Argentina’s fiscal deficit, increasing interest rates and reducing energy subsidies.

Following two-year negotiations with the IMF, a favorable vote by the IMF's board of directors would entail Argentina's 22nd agreement with the international lender.

Once the IMF deal is signed off by the board of directors, Argentina is expected to quickly receive around $9.8 billion - with the remaining disbursements dependent on the Latin American nation hitting specific targets which are reviewed over a quarterly period.

As the 2018 IMF deal stands, Argentina is set to make payments of around $2.8 billion this month on March 22 and further repayments this year.

However, under a new deal, funds would be released over 30 months, with Argentina making repayments between 2026 and 2034.

At the beginning of March, President Alberto Fernandez told congress that the IMF agreement was the best deal that could be achieved, providing certainties for Argentines by avoiding the potential impact of a default.