Argentina reaches prospective deal to refinance $45B debt

March 3, 2022 GMT
Argentina's Vice President Cristina Fernandez, left, and President Alberto Fernandez, wave after attending the ceremony marking the year's opening session of Congress in Buenos Aires, Argentina, Tuesday, March 1, 2022. Argentina’s government announced Thursday, March 3, that it reached a deal with the International Monetary Fund to refinance some $45 billion in debt, marking an attempt to stave off default and remove economic uncertainty that has hung over the country during two years of negotiations. (AP Photo/Natacha Pisarenko)
Argentina's Vice President Cristina Fernandez, left, and President Alberto Fernandez, wave after attending the ceremony marking the year's opening session of Congress in Buenos Aires, Argentina, Tuesday, March 1, 2022. Argentina’s government announced Thursday, March 3, that it reached a deal with the International Monetary Fund to refinance some $45 billion in debt, marking an attempt to stave off default and remove economic uncertainty that has hung over the country during two years of negotiations. (AP Photo/Natacha Pisarenko)
Argentina's Vice President Cristina Fernandez, left, and President Alberto Fernandez, wave after attending the ceremony marking the year's opening session of Congress in Buenos Aires, Argentina, Tuesday, March 1, 2022. Argentina’s government announced Thursday, March 3, that it reached a deal with the International Monetary Fund to refinance some $45 billion in debt, marking an attempt to stave off default and remove economic uncertainty that has hung over the country during two years of negotiations. (AP Photo/Natacha Pisarenko)
Argentina's Vice President Cristina Fernandez, left, and President Alberto Fernandez, wave after attending the ceremony marking the year's opening session of Congress in Buenos Aires, Argentina, Tuesday, March 1, 2022. Argentina’s government announced Thursday, March 3, that it reached a deal with the International Monetary Fund to refinance some $45 billion in debt, marking an attempt to stave off default and remove economic uncertainty that has hung over the country during two years of negotiations. (AP Photo/Natacha Pisarenko)
Argentina's Vice President Cristina Fernandez, left, and President Alberto Fernandez, wave after attending the ceremony marking the year's opening session of Congress in Buenos Aires, Argentina, Tuesday, March 1, 2022. Argentina’s government announced Thursday, March 3, that it reached a deal with the International Monetary Fund to refinance some $45 billion in debt, marking an attempt to stave off default and remove economic uncertainty that has hung over the country during two years of negotiations. (AP Photo/Natacha Pisarenko)

BUENOS AIRES (AP) — Argentina’s government announced Thursday that it reached a deal with the International Monetary Fund to refinance some $45 billion in debt, marking an attempt to stave off default and remove economic uncertainty that has hung over the country during two years of negotiations. The deal would allow Argentina to begin repaying its debt starting in 2026, and continue through 2034, the economy ministry said in a statement. The existing arrangement had concentrated payments in 2022 and 2023, the statement said.

Revised terms must be approved first by Argentina’s Congress and then the IMF’s executive board to take effect. The government said it would submit legislation later Thursday, though it remained unclear whether the measure would pass.

Some of the government’s legislative coalition, particularly lawmakers allied with Vice President Cristina Fernández, who was president in 2007-2015, have already signaled their opposition. They begrudge the multilateral lender for forcing Argentina to adopt severe austerity measures in the past and fear this deal will produce similar circumstances.

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Government-allied lawmakers may find common cause with members of the opposition, who will scrutinize the agreement’s details for signs that it could worsen the nation’s economic prospects and impose hardship on ordinary people.

A committee in Congress’ lower house is expected to begin debating the issue Monday.

If approved, the deal would replace the lending program extended by the IMF in 2018 during the administration of conservative President Mauricio Macri. At the time, it was the biggest loan program that the IMF had ever granted to a single country.

President Alberto Fernández in late January announced an understanding with the IMF to refinance the debt, and the two sides had since been engaged in talks on the details.

The IMF said in a statement that the new program is “pragmatic and realistic” and that it aims to address Argentina’s high and persistent inflation through reduced financing of the nation’s fiscal deficit.

It will “strengthen macroeconomic stability and attend to the deep challenges facing Argentina,” the statement said.