The economist lowered the price of talks with the Fund. It marked a key political aspect that is needed to achieve the agreement and raised alternatives
The economist Juan Carlos De Pablo minimized the negotiations that are being carried out with the IMF and warned that the agreement depends on “a political connection” between the government and other countries to obtain the approval of the organization. In turn, he proposed three scenarios if there is agreement or if there is not.
Referring to the meetings that officials from the Ministry of Economy and the Central Bank are holding with technicians from the International Monetary Fund (IMF), he pointed out that “negotiations are being carried out with the bureaucracy, papers are presented, details are discussed, but the negotiation is political. ”
Why you downplayed the negotiations with the IMF
He considered that “none of the parties”, both the Argentine government and the IMF, “is in a hurry” to close a negotiation and that the agreement will be given “in a reserved meeting, not in one that is public.”
De Pablo expressed: “Anyone knows that the 2018 agreement with the IMF had technical flawsAnd that is known to the bureaucracy at the back, I know it and any economist in Argentina knows it. ”
Explained that that agreement was achieved “due to the political connection” that ex-presidents Mauricio Macri and Donald Trump had., which he described as “not negligible.”
“This government has this peculiarity, it does not hit Nicaragua, Cuba, Venezuela and then prays that (Joe) Biden will give him a political hand with the IMF, that’s too much,” doubting the possibility that the government gain political support for an agreement with the IMF.
De Pablo raised several scenarios about the negotiation with the IMF
Three scenarios
De Pablo evaluated three possibilities regarding the agreement with the Fund, if it was achieved or not.
He also considered: “If we have an agreement, not everything will be a marvel and if not, the economy will collapse, and my impression is that it is neither one thing nor the other “.
“Everyone says that the markets are waiting for an agreement, but if that happens it will be difficult for an Austrian investor to come and buy Argentine securities,” he added in a radio dialogue with Luis Majul.
The economist questioned the view that “everyone is watching us” and added: “Don’t get your hopes up, If they are going to give us a ball, it is because of a political reaction or because of some sensation with a new crisis (in Argentina) it will drag another country“.
De Pablo questioned the BCRA’s claims that dollar deposits are backed by holding banks
From Pablo on the Central Bank
De Pablo questioned the Central Bank’s assertions that dollar deposits are backed by the tenure held by banks.
“If I were a civil servant, I would not say it, because if the dollars are there, I would not say them, because every time they say it then people say no,” said De Pablo.
Meanwhile, he said that the economy has “a very anomalous situation, sensitized”, and expressed: “There are as many estimates on reserves as there are economists and there’s a complicated story and feel, “virtually alluding to previous financial crises.
He warned that “the bulk of those dollars are from companies, not individuals and suddenly it can give a different behavior because probably the white position of the economy has fewer alternatives.”
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