The minister participated in a teleconference with economists. He said the government is flexible and heard criticism of the proposed excessive grace period
“Some creditors accepted and with others we will continue negotiating, there is still time to reach an agreement,” said Martin Guzman during a webinar organized by Columbia University and in which the Argentine economist Martín Uribe and Harvard professor Jeffrey Sachs also participated. The economy minister did not risk forceful definitions a few hours after the offer of the debt ends.
After reviewing some points about how the economy was coming, Guzmán said that “it is our intention to have a common agreement with the creditors, that we have a good relationship with them.”
And he called again to the bondholders abroad to make a counteroffer. “If they find other combinations that satisfy the debt sustainability framework that we have outlined, we will take it into account,” said the minister, in the sense that he would not necessarily be tied to the supply mix (grace period and capital and interest withdrawals). ). “We are flexible,” he added.
The most interesting thing was Guzmán’s “crossing” with Martín Uribe, also a professor at Columbia. The Cordovan economist living in the United States called himself “devil’s advocate” and said that from the creditors’ point of view, Argentina is making no effort. He said it in the sense that the grace period includes until the end of Alberto Fernández’s term.
“I would say that another offer can be made where the government shares the effort with the next one. Starting to pay sooner would make the proposal more credible,” Uribe said. “If the government does not do this, it will not be possible to cut the vicious circle of default,” he added, recalling that all governments throw the ball at the next one and that this is no longer credible for investors. He also asked for a tax and state reform.
Guzmán had his time to respond but only stated that in the original idea, the grace period was until 2024 and 2023 as now. “It is not a question of one government or the other, but of charting a path for debt to be sustainable over time,” replied the economy minister.
But the most official with the Argentine case was not Guzman but the new fetish of Kirchnerism: Jeffrey Sachs. The economist was a faithful defender of the proposal made by Argentina and predicted that “they cannot and will pay more” than what was presented.
He reiterated what Alberto Fernández said to him in the sense that there will be massive defaults and that one from Argentina does not suit the creditors. The apocalyptic forecast for now is far from being fulfilled and even during the pandemic there were countries such as Paraguay that recently placed $ 1 billion in 4.5% bonds or the case of the Santiago de Chile Metro that got $ 1.5 billion through securities to 10 and 30 years.
“I think the government made a good and serious offer to the bondholders. The creditors are wrong. The debt with 7% coupons was unpayable before and after Covid19. It was not sustainable,” said the economist who just signed a request on Wednesday. with almost 200 academics in favor of Argentina in the middle of the exchange.
Sachs argued that if Argentina falls into default “it will not be alone” and that creditors do not want a massive financial crash.
Finally, and to close the conference that lasted an hour and a quarter, Guzmán was again receptive to the creditors presenting some counteroffer. “There is always a chance to learn and if there is another combination that is sustainable, with common sense and realism, we will see it,” concluded the minister.
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