Macri’s Sputtering Revolution as ‘reported’ by Robin Wigglesworth. Old Socialist comments

The game underscores the tempestuous, on-off relationship Argentina has long had with the IMF, which this week took another unexpected turn with President Mauricio Macri’s decision to ask for an assistance package from the IMF.

Is Wall Street already in over its head on the new $257bn of bonds outstanding? With its enthusiasts: ‘Pimco, Allianz, Franklin Templeton, BlackRock, Goldman Sachs Asset Management, AllianceBernstein and Fidelity’

Those Wall Street enthusiasts might be on the right track?

 

Nonetheless, there remain a lot of tricky questions surrounding what kind of package Buenos Aires and the fund will negotiate — and whether they will pull it off.

On Wednesday it emerged that Argentina would not, as was initially reported, apply for one of the IMF’s “flexible credit lines”, but instead go for a “standby arrangement,” the organisation’s workhorse programme. Listen: Argentine president seeks IMF assistance In truth, an FCL always looked hopelessly optimistic.

The IMF has  wisely chosen to use the SBA economic instrument. Mr. Wigglesworth’s arguments given some necessary pruning :

…in truth, an FCL always looked hopelessly optimistic. This facility is akin to the IMF ’s platinum credit card, and available only to countries that pass nine conditions with flying colours.

The lesser “precautionary and liquidity line” might have been more feasible, but is also primarily designed for countries with more solid fundamentals than Argentina. That left an SBA as the obvious outcome.

That could prove hard to sell politically.

Still, the government remains reasonably popular and the Peronist opposition is a shambles, which gives Mr Macri the cover to make tough choices.

But here is the apology for the failed two year and less that six month ‘reformist government’ of Macri’s ‘‘gradualist reforms’: Austerity in its least unpalatable form.  And the Neo-Liberal Melodrama of thwarted Economic Virtue, victim of Populist rabble rousing:

The danger is that this week’s drama is just another act in a sadly familiar Argentine play: reformist government gains power and delighted investors throw money at the country. Reforms happen too slowly to fix economic vulnerabilities and a crisis at some point ensues. Reformist government is ousted by populists, shocking investors and leading to a financial and economic disaster.

Mr. Wigglesworth, the abject failure of Macri’s ‘gradualist reforms’ will mark the return of ‘Populist’ Mrs. de Kirchner, or, if not her, then some other ‘Populist’.

Old Socialist

https://www.ft.com/content/5612f998-545d-11e8-b3ee-41e0209208ec

 

 

 

About stephenkmacksd

Rootless cosmopolitan,down at heels intellectual;would be writer.
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