"Argentina cannot pay anything, neither today nor for many years to come. " After a meeting of representatives of the center-left ruling coalition and the opposition on Thursday, April 16, Martin Guzman was very firm. The Argentine Minister of Economy announced the main lines of his debt restructuring offer to the country's private creditors: 62% discount on interest payments, 5.4% capital reduction and a recovery in payments only from 2023.
Argentina's offer, which should allow it to avoid the disbursement of nearly 40 billion dollars (36.8 billion euros) over the next three years, must be formally presented and detailed to private creditors Friday 17 April. "There are a lot of interests at stake here. There will be voices of creditors rising to demand that Argentina pay more than it can pay, " anticipated Mr. Guzman. "Just as we are all united to face the pandemic (from Covid-19), we all need to be united in the face of the debt problem, " insisted Argentine President Alberto Fernandez, who spoke briefly after his minister.
"Virtual fault"
The head of state has ruled that Argentina, which has been in the grip of a serious economic and social crisis for two years, is currently "In a sort of defect (of payment) virtual ». In power since December 2019, he authorized, in March, the restructuring of more than $ 68 billion in debt held by Argentina’s private creditors (out of the country's $ 311 billion total debt).
Argentina has also asked the Paris Club, which groups the main creditor countries, for an additional year to reimburse, expected in May, $ 2.1 billion. "Argentina is continuously on the verge of defaultsays Martin Kalos, professor of economics at the University of Buenos Aires. This daily uncertainty is the prelude to a default that can only be avoided by successfully negotiating with private creditors. "
The economist believes that the offer made to them is " reasonable ", but expects intense negotiations between the Argentine government and the creditors: “The three-year moratorium will be at the heart of these discussions for the next few weeks. Not touching anything during this period can be problematic for creditors. " They must in theory respond to the Buenos Aires proposal within twenty days.
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