Argentine Senate approves law to renegotiate external debt

The law authorizes the Minister of Economy to renegotiate the conditions of the payment of the foreign debt taken during the administration of former president Mauricio Macri

February 06, 2020 by Peoples Dispatch
The Argentine Senate unanimously approved the bill of the “Restoration of Sustainability of the External Public Debt” on February 5.

On February 5, the Argentine Senate unanimously approved the bill of the “Restoration of Sustainability of the External Public Debt”, presented by the left-wing government of President Alberto Fernández. The initiative was approved last week in the Chamber of Deputies, with only two against it. The said law authorizes the Minister of Economy, Martín Guzmán, to renegotiate the conditions of payment of the huge foreign debt taken out by Argentina during the administration of former right-wing president Mauricio Macri.

The law gives power to restructure the debt contracted with the International Monetary Fund (IMF) as well as with other banking organizations. It also gives Guzmán the freedom to determine the terms and procedures for issuing new bonds while choosing which financial institutions and advisors to act as process coordinators or as placement agents.

According to the data from the Ministry of Finance, Argentina’s gross debt amounts to some 323,127 million dollars, which represents 95% of its gross domestic product (GDP).

Last week, President Fernández was on an international tour to several European countries to strengthen bilateral relations and to seek their support in mediating negotiations with the IMF. President Fernández succeeded in winning the support of the governments of France, Germany, Italy and Spain.

However, the last decision will be in the hands of the United States, as the US is the only country that has veto power in the international financial entity so its support is essential. As such, President Fernández is trying to schedule a meeting with US President Donald Trump, which is expected to be held in the month of April or May this year.

The left-wing government of the Frente de Todos coalition (the Front for All), led by President Alberto Fernández and vice-president Cristina Fernández de Kirchner came into power on December 10, 2019, and since then has been working to reverse the socio-economic crisis created by the previous right-wing government of Juntos por el Cambio (Together for Change). The government of the Front for All has already taken a number of measures to improve the living conditions of the Argentinians and the approval of the Restoration of Sustainability of the External Public Debt Law is a step further to uplift the precarious Argentine economy.

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