Guzmán: “The creditors were working hard to present an alternative”

In the midst of the negotiation process with private creditors to try to close an agreement before next Friday, the Minister of Economy, Martín Guzmán, defended again the sustainability criteria contemplated in the restructuring proposal presented in April and remarked that it remains open to dialogue with the bondholders to find the best possible exchange alternative.

He did so by exposing, virtually, at the Council on Foreign Relations (CFR), a powerful think tank led by Richard Haass, which brings together investors, diplomats, United States officials and analysts, and specializes in foreign policy and international affairs.

“We only received a counter offer, which is not aligned with the principles of sustainability. The conclusion is that the debt would not be stable and the economy would not be able to stabilize. I did not check my email. Until an hour ago, I had received nothing. But we know that creditors have been working hard to present an alternative. We are open to listen; we want to hear the alternatives, “he said.

The talk was moderated by the former US Treasury Secretary, Robert Rubin, and the former deputy managing director of the International Monetary Fund (IMF) participated, Anne Krueger, who historically maintained a critical stance towards Argentina, and representatives of BlackRock, to whom the minister publicly exposed when he lamented, weeks ago, that the counterproposal presented by the fund was unrealistic. It was not, of course, a friendly scenario for Guzmán, which is why the Government marks his presentation as a gesture by Argentina.

Guzmán began the meeting by giving a brief presentation on the policies that Argentina has adopted in recent years and how the current indebtedness and the negotiation process with creditors were reached, which for now is not showing signs of success. He stated that the coronavirus caused a shock in these circumstances and that the country will only be able to grow again when the pandemic passes.

After his presentation, Robin asked several questions alluding to the claims of the creditors and transmitted, in each of his questions and gestures, his mistrust and concern about the Argentine strategy. One of the questions focused on the “moderate” growth forecasts on which the restructuring offer proposed by the Government was based.

Robin echoed creditors’ concerns about an “unrealistic” scenario, which leaves little room to raise the average coupon in the offer, but Guzmán reaffirmed that those numbers are realistic. “Of course we want to grow more, but we offered bondholders a coupon tied to GDP that they did not find attractive,” said the minister, adding: “We do not want to repeat the mistakes of the past. The forecast we presented was the most realistic. ”

The former US Treasury secretary also asked him about Argentina’s strategy with the International Monetary Fund (IMF) and why the official decision had been to negotiate with the bondholders first rather than with the Fund. In this regard, the minister explained that it was a matter of time, since this year there are no capital maturities with the agency and there are with private creditors.