“Argentina has the letters to renegotiate its debt”

The former head of the International Monetary Fund (IMF) Dominique Strauss-Khan considered that “Argentina has the letters to renegotiate its debt in good conditions” and expressed his “full confidence” that the Government can achieve this objective.

“It seems to me that Argentina has in its hands the letters that should allow it to renegotiate its debt in good condition. I have full confidence in the country’s authorities so that they can do so,” Strauss-Kahn said.

In this framework, he advised the Argentine government “to be completely transparent” since “mistrust (on both sides) has greatly clouded relations between Argentina and the IMF in the past.”

Debt step by step

“It is normal for the country to negotiate step by step with the IMF, but taking into account that the institution is there to help, not to punish, as was too often believed in Argentina. The IMF is a doctor. They call him because you are sick, but it doesn’t interfere with his business, “he said.

He noted that “the potions he gives can be bitter, like most treatments. Sometimes they can seem very violent, but it is because the patient is very sick. To be successful, both parties must know each other well: the IMF must know the reality of Argentina, and Argentina must know how the IMF works. ”

Coronavirus impact and debt

Regarding the crisis caused by the coronavirus, the former head of the Fund said that “the income of a part of the population is fading, consumption considered non-essential is postponed, as it is made impossible by confinement.”

Asked whether the issue that central banks around the world are making could generate inflation, Strauss-Khan said “the risk exists. But, on the one hand, it is moderate, and on the other, a little inflation will not harm us. “

The coronavirus worsens the economic situation.

“This should be said with caution when talking about the Argentine situation. A small inflation is an inflation of 2% or 3%, not a double-digit inflation. Finally, in any situation you have to choose the lesser evil,” he clarified.

He argued that “today, the greatest risk, beyond the risk to health, is to see part of our productive apparatus collapse. Faced with this, inflationary risk at the global level is a lesser evil.”

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