Vol 19 (2022) - Issue 4

Article preview

Argentina’s Latest Tango (or Tangle) with the IMF: The Deal That Almost Wasn’t – Part Two

Synopsis
Part One of this article provided an overview of the process of negotiations between Argentina and the IMF and why it was considered critical that Argentina reach a deal with the IMF by late March 2022 to refinance the IMF’s outstanding 2018 loan to Argentina.
In Part Two, we explore why in principle Argentina and the IMF might have had a shared interest in reaching a deal on a new IMF program and loan (especially in doing so in a relatively timely manner), and we then review the major substantive policy differences that divided Argentina and the IMF as well as the not insignificant political considerations that affected both sides as the negotiations progressed. We conclude by considering, among matters, the competing perspectives on whether the new Extended Fund Facility (EFF) agreed to by Argentina and the IMF represents a positive step forward in how the IMF addresses the sovereign debt challenges of emerging economies or whether, instead, it reflects a failed attempt to address Argentina’s longstanding, underlying structural economic problems.
(Note: The writing of Part Two was completed as of mid-May 2022 (at the same time the writing of Part One was completed) and therefore it speaks of developments only as of that date, not as of the date of publication of Part Two.)