Expanding his Political Base

Last week, the number two of the IMF, Gita Gopinath, passed through Buenos Aires and on two occasions reiterated that the Government should seek, in addition to social support, political support to approve the economic reforms, such as changes in labor legislation that Javier Milei seeks.

The Fund’s economist first referred to this through a statement distributed at the end of her visit to the country when she was already with one foot on the plane and then expanded further in interviews with the written press (one with Clarín) over the weekend. past.

“Argentina has had a decline in its real per capita income for more than a decade and to reverse this situation, a new focus and bold actions are needed to achieve it. These processes are always complex on the political front and it will be necessary to have a pragmatic approach. In that sense, It will be important for the Government to generate social support, as well as political consensus to advance key reforms”.

Gopinath publicly said about “getting political support” because he had previously said it to Milei and Caputo.

And a few hours later, at a meeting of economic ministers and presidents of G-20 Central Banks held in Sao Paulo, it was the director of the IMF, Kristalina Georgieva, who conveyed the same message to officials.

Global financial diplomacy has rules. One condition For the IMF and the United States to support a line of work with a country, and eventually release funds to provide aid, the government must have back of the opposition and other civil society leaders.

“The word of the authorities is no longer enough. “That could happen in the 1980s.”explains economist Daniel Marx, former Argentine negotiator with the IMF and external creditors in the 80s, 90s and 2000s. “That began to change precisely with Hörst Köhler (N.E.: the director of the IMF between 2000 and 2004) because the organization began to take into account not only what leaders say but also what they do and It was necessary to demonstrate that the policies lasted over time and were durable.”.

Milei’s call to the governors on Friday night for a 10-point agreement is then framed within this dynamic of negotiations with Washington and domestic politics at the same time.

There were precedents in history that Milei, sooner or later, would come across these proposals in the United States. Washington bureaucracy leaves no room for the plans of the leaders of countries that They cut themselves without paying attention to the rest of the actors in political life.

Juan Pablo Baylac, De la Rúa’s spokesperson at the time, recalled on Twitter on Saturday when “on July 9, 2001, that government called for an agreement with the governors in Tucuman. The crisis began and the IMF did not release the committed funds and asked that we reach an agreement or pact with the governors. Then there was a mass, a popular event where a crowd of people from Tucumán attended.” Baylac drew an analogy between De la Rúa and Milei: “Won’t this pact of May 25 in Córdoba be a consequence of the conversations with the IMF and the US Secretary of State who was in Argentina these days, I ask?”.

Macri, for his part, in May 2019 explored an agreement with Peronism with the aim of giving predictability to the economy until the PASO of that time (August) and closing ranks behind 10 points among those who agreed with the PJ in matters of fiscal balance, an independent Central Bank, respect for the law and private property, modern labor legislation, among others.

The announcement by the PRO leader came days before Roberto Cardarelli, then head of the IMF mission for Argentina, arrived in the context of the fourth review of the plan that the country had with the organization. A disbursement of US$5.3 billion was at stake and could be released in June. Finally the money arrived in July, just before the PASO that he would lose to Alberto Fernández, and it would be the last money that Macri would receive from the IMF. Luis Cubeddu was on that Fund team, today in charge of the Argentine case.

The dollars that Argentina has to pay from 2025

Last week the Government denied that Argentina had asked the IMF for fresh funds. Although spokesperson Manuel Adorni immediately pointed out: “But any issue can be discussed.”

For his part, Gopinath responded when asked if the Argentine authorities have requested access to new funds from the IMF that between the organization and Milei’s economic team “we talk about many things within the framework of our permanent commitment to the country, but I have nothing.” concrete thing to say about this issue.”

The IMF for now prefers to see. You know that since 2025 Argentina’s commitments with external creditors exceed US$ 7,000 million between capital and interest. Today Argentina does not have that money because the reserves are negative. Furthermore, starting in 2026, the country has to begin repaying the loan that Kirchnerism requested from the IMF in 2022. As economist Emmanuel Alvarez Agis says in a recent report, “no matter how much primary fiscal surplus is achieved, these commitments cannot be canceled without reserves.”

Hence the need to seek investments by Milei. But many bankers and fund managers who passed through Buenos Aires recently asked the same thing: How sustainable is your policy? What will happen to my money if Milei is not there? What guarantees are there?

The IMF saw it: it asked for political consensus. Did Milei see her too?