Spain backs Argentina in IMF debt talks

Spain backs Argentina’s efforts to renegotiate its debt with the International Monetary Fund, Prime Minister Pedro Sanchez said Tuesday after talks in Madrid with the South American country’s president.

Argentina is looking to replace a lending programme signed by the previous government in 2018 under which it currently owes the IMF about $45 billion.

In recession since 2018, the former Spanish colony must also repay a $2.8 billion loan with the Paris Club of creditor countries that provide sustainable solutions to debtor countries.

Speaking at a news conference with Argentine President Alberto Fernandez, Sanchez said the two nations were working to get the IMF to “revise” its policy of imposing surcharges on some debtors.

These surcharges are “obviously greatly hurting Argentina’s financial possibilities”, he added.

The IMF says it imposes surcharges to create an incentive for nations to exit its lending programmes as quickly as possible.

It has said it is willing to discuss a request by Argentina for lower rates, but any changes must be based on a consensus among members of the Washington-based body.

Fernandez thanked Spain for its support for his efforts to restructure the debt his government “inherited” from the previous conservative administration of former president Mauricio Macri.

The 62-year-old Argentine president began a tour of Europe on Sunday with a stop in Lisbon where he also won backing from Portuguese Prime Minister Antonio Costa for a repayment deal.

His tour will include stops in France and Italy as well as the Vatican where he will meet with Pope Francis, a fellow Argentine.

The pandemic has ravaged Argentina’s already ailing economy, complicating efforts to make good on its obligations.

Sanchez also announced he will visit Argentina on June 8-9.