Argentina: No “re-profiling”, out with the IMF!

Default simply means the stopping of payments. It is a word that the capitalist politicians avoid saying and that the “markets” would rather not hear. But the only truth is reality and that is when the so feared spectre appears. Drowned by the political and economic crisis, Macri´s government is trying to postpone the deadlines of the debt payments. What Alberto Fernandez says (and what he is quiet about). Why we insist that we must break with the IMF.

In general, there are two ways for an indebted country to fall into a situation of default. One is unwillingly, when, despite the decision of applying a harsh austerity plan to those in the country in order to pay the loan sharks outside, the conditions of that debt are so abusive that it is impossible to comply. That is what is happening to Macri now.

The other path is the opposite one, a sovereign default that is consciously declared, considering that the millions that are taken monthly by financial creditors does not come from a legitimate debt, but from a vulgar, illegal and fraudulent fraud scam.

The non-payment of an external debt, by suspension, audit, moratorium or another variant is nothing new in the history of dozens of countries in the world: the United States itself did not pay their debt to Great Britain when it became independent. Non-payment is the alternative of national self-defence that the MST and the FIT-Unidad have defended for a long time.

The new measures: more agony, more debt

The total public debt of Argentina (in dollars and pesos) equals 330.000 million dollars, which surpasses the gross domestic product. This means that what we owe to the creditors is more than the total wealth our country produces in an entire year. And 80% of that debt is in dollars; with the recent devaluation, it demands more pesos to cover it. That debt in dollars includes the 57.000 millions of the stand-by loan of the IMF, a 5.400 million part of which was supposed to be given in October and ended up frozen. In response to the collapse of the national economy, as announced by the minister Lacunza, the Macrist government took four measures:

1. The approval of Decree 596 with a new payment schedule to “reprofile” the debt in short term State bonds, around 21.500 million dollars. On the original due date, 15% of the total will be paid, three months later other 25% and after six months, the remaining 60%, with more interests.

2. Negotiate with the international banks who are creditors of the debt, the medium term bonds (10 years) emitted under foreign legislation, without removal of interests nor capital. This is neither easy nor quick, because it requires the approval of a majority of the holders of every bond.

3. Send to the Congress a bill to “reprofile” the debt in pesos in the medium term that has been emitted under Argentinian legislation. When he signed with the IMF, he did not consult anyone, now that the night is upon him, Macri appeals to Congress. It is not his decision, but a demand of the IMF itself that, in view of the political power vacuum, wants the Frente de Todos to confirm its commitment to pay.

4. Renegote the debt with the IMF. The mission that came to the country last week was a political operation to closely measure the temperature of the crisis, more than a technical revision of the economic numbers. As an electoral candidate, Alberto Fernandez took distance of the Fund, while his economic team “ratified his commitment to comply with every obligation”.

This desperate “reprofiling” of the debt does not only mean the extension of payment due dates, but also a higher interest rate. Precisely there lays the business of the creditors, the usury: keeping you indebted for life, with higher and higher rates, so that you continue indebted despite paying.
This is the dark history of our country in the last decades, at the expense of the suffering of the people, rapine and decay: before the 1976 dictatorship, we owed 7.000 million dollars; after the coup fell, we owed 49.000 million, and every single government continued paying; the Kirchner government bragged about being a “serial payer”; it did not “lower” the debt and when it left we owed over U$S 200.000 million; and with Macri, who paid without complaining and even asked for more debt, we now owe U$S 330.000 million. We must stop this now!

We must “reprofile” them: kicking out the IMF, stopping the capital flight

As we have held for many years, we propose not paying one more dollar of the external debt and kicking out the International Monetary Fund, beginning an immediate public audit of the entire debt, while suspending payments of capital and interests, because at the end of that revision it will surely be confirmed that the creditors actually owe us.

Just this year, taking capital and interests into account, the payments of the debt surpass U$S 58.700 million. Between 2020 and 2023, the expected amounts will be around 30.600 to 38.200 million dollars per year. That is in addition to the payments to the IMF, that begin in 2021.

If you buy a TV in monthly payments, it is correct to pay that debt. What is not right, is that someone demands you to pay for something you never received. And even less if, to pay for it year after year, half the children in our country are poor and malnourished. The external and eternal debt is a true social crime. And “renegotiating” it, as Alberto proposes, means continuing to pay that fraud.
At the same time, it is false that if we do not pay they will seize our assets. It is obvious that the banks and other creditors will attempt to sanction us, but the truth is that in the case of a dispute they have so much more to lose here (banks, lands, corporations) than what Argentina has in other countries. And if there were a commercial blockade, we could directly buy, cash in hand, whatever we need or through triangulation with other countries.
Lastly, after his meeting with the IMF mission, Alberto pointed out that a great part of the capitals that enter the country through “loans” end up going offshore. That is true. Capital flight is estimated at U$S 30.000 million per year. Since that money does not leave the country in luggage like Antonini Wilson´s, but through bank manoeuvres, the only way to stop the flight is through the nationalization of the banking system and foreign trade, key measures that Alberto disregards.
The key to a country with dignity and wellbeing for the majorities is through the non-payment of the external debt, a break with the IMF and the nationalization of the banks and the foreign trade.

Pablo Vasco