Direct – Ahmed Shawky: Heading Argentina to a state defaulted on debt again this month with the entry of the state a critical period of crucial conversations with international creditors.
The government of Argentina’s proposal to restructure $ 65 million of its foreign debt last month, but rejected a group of asset managers, the main show, which ends today Friday.
Not only this, but due to grace period ends for about $ 500 million of interest payments on three bonds Foreign on 22 May.
If no agreement is reached and payment is made, it leads to the sliding of Argentina to the state of default for the second time in two decades, according to the network “policy.The.Me.The context of the” American.
This comes after nearly 5 months of starting during the administration of President Alberto Fernández, as Argentina is already experiencing a recession that lasted two years and inflation very high and the crisis of mounting debt, was the last thing waiting to be subject to close national since 20 March last for MERS-CoV.
How I got Argentina into this situation?
Earlier this week, said Economy Minister Martin Guzman, the newspaper “Financial Times” the country is ready to consider a default on 65 billion dollars of foreign debt unless the investors on the recent negotiations.
He pointed to the coronavirus as the cause of the inability of Argentina to pay an unprecedented level of debt.
While she said “Jimena Blanco” president of the Latin American section in the “fees realised” the network “policy.The.Me.Context”: “as was likely, we expect to prefer Argentina defaults which can’t blame it on the recession due to a virus Corona”.
She explained, “Blanca” they think that the defaults of the new has now become a “matter of time” in the timing of the consulting firm political risk probability of 89 percent that the state registration of the event of default of the ninth in its history before the end of the year.
She added Blanco: “for us, this confirms the political strategy of the government, we see that they pave the way for a political response when the intervention in case of default”.
He said “Blanca”: “the government is ready to negotiate with bondholders, but the publication of documents that was supposed to be a secret, now says any trust would be present was confidence levels are already low”.
Last Tuesday, appeared published on the website of the Ministry of economy on the internet shows some details about the talks with the creditors dating back to December 2019.
She added: “If you break the trust, what do you have left to negotiate?”.
Create another default would make it difficult to “rebuild trust”
Argentina is also a city of a substantial amount of the IMF which support the debt negotiations in the country, but Argentine economy minister said the agency “Reuters” earlier this week that the country defaulted on debt worth US $ 2.1 Paris Club.
Argentina asked to postpone payment for one year, which was due on 5 May, although it is not yet clear whether the group had agreed or not.
The Paris Club is an informal group of 19 members meet every month in the French capital in an attempt to find practical solutions to the problem of payment faced by the state of the city.
In 2001, dumped Argentina from the repayment of approximately $ 100 million of debt, and that in the worst economic crisis in the country’s history which resulted in millions of citizens of the middle class into poverty – and as a result throws a lot of people in Argentina in the financial policies imposed by the IMF at that time.
And the current administration to coordinate the work balanced, they have pledged to refuse to approve the type of cuts in the budget that insists upon Monetary Fund returned to the countries affected by the crisis, but has also hope to restructure obligations with its largest creditor.
She said “Carl JSON” great analysts in Latin America have a “market” for research: “we believe that there is a significant risk happen to find at least an interim for repayment of the debt, even if the negotiations with creditors ready”.
Said Salman: “the government says they know what they can actually afford to pay, emphasizing that their debts can’t afford it and they simply can’t pay in the coming years, and that’s why they call suspension of the debt”, warning that the mix is another from the repayment difficult for the state to rebuild confidence among international creditors.
The imposition of Argentina has strict measures in an attempt to slow the spread of MERS-CoV.
The country has seen the registration of a much smaller number of cases and deaths from neighboring Brazil, which has seen its Chairman, Jay the Pocono criticism from across the political spectrum to ignore the frequent threat of virus.
Until now, Argentina registered 5208 case of infection with MERS-CoV, with 273 deaths, according to data compiled by the Johns Hopkins University.
At the same time, Brazil reported the 126.611 thousand cases and 8588 deaths as a result of the virus.
The IMF expects a contraction of GDP of Argentina grew by 5.7 per cent this year, before growing by 4.4 percent in 2021.