Economy Minister Martín Guzmán was interviewed by Bloomberg TV
After the letter received last night from the three groups of creditors, in which they show him, with figures, that they can block the swap, the Minister of Economy, Martín Guzmán, again ratified the current offer and stated that Argentina cannot pay more. He did this in dialogue with Bloomberg TV, where he said that the country has made a « significant effort » in the months that the negotiation has taken and that it is not only talking about numbers, but about the lives of the people and the conditions that the public and private sectors will face going forward.
The minister reiterated the statements he has been saying in recent weeks, even after receiving a new counter-offer from the three bondholders committees at the beginning of last week. After that proposal, which managed to collude even the closest group to the Government – the Creditors Committee (ACC) -, the Government remained firm in its position and insisted that there would be no changes in the economic value of the offer. While the NPV of the official proposal is USD 53.5, that of the creditors reaches USD 56.5 for each nominal USD 100.
“We don’t want to commit to something that we are not going to be able to accomplish. In the past things were done wrong in that regard; now we want to do them well « Guzmán remarked in the interview.
When asked why an offer of just $ 3 above the official one was not sustainable, the minister noted that « sustainability is a concept of probability and is based on assumptions. » Although he said that « nobody has the crystal ball, » he referred to the work done with the technical team of the International Monetary Fund (IMF), which had even raised a lower figure than the one finally proposed.
Martín Guzmán stated that they will seek to negotiate a new program with the IMF after the exchange with the private companies ends.
Regarding the legal aspects, which the Government itself recognized that it would be willing to modify to approach the creditors’ demands on the contractual terms, Guzmán said that Argentina is a member of the G20 and the IMF, so the guidelines that the community will follow international consider relevant. “In 2016, the country adopted the language that had been agreed internationally, so if there is any innovation, we will adopt it. It is something that exceeds us, ”said the head of the Treasury portfolio.
Regarding the negotiations with the IMF for a new programGuzmán reiterated that they will begin the dialogue once the renegotiation with the private creditors ends and he was confident that they will reach a successful agreement, since the link so far was constructive, he said. Anyway, he stated that this will happen « regardless of what the result is with the bondholders. »
On the other hand, the minister made special emphasis on the need to « Achieve fiscal consolidation but that allows the economy to recover », much more after the current crisis, which will cause a minimum drop in activity of 10%. Guzmán once again gave as an example what happened in the last four years, where primary spending fell sharply but this did not restore confidence. « Following Covid-19, it will take us longer to reach fiscal balance, but it is our goal« He remarked, while noting that they are preparing a tax harmonization reform that will make » the fiscal sector more robust. «
The minister also referred to access to international credit markets and assumed the strong restrictions that Argentina has. Therefore, he argued, it is necessary to reach an agreement with the creditors. In any case, he stated that « there must be prudence in the use of international credit, since the country had access in the past and then lost it. » On the other hand, the official recalled that together with his team they were working hard to recover the financial market in local currency, and the objective is to continue on that path.
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