Parliament Gives Milei Green Light to Sign Loan Agreement with IMF

The Argentine parliament has given the green light to the government of ultra-liberal Javier Milei to conclude an agreement with the International Monetary Fund (IMF) on a new loan to refinance Argentina's debt.

The Chamber of Deputies approved by a relatively comfortable majority (129 votes in favor and 108 against) the decree authorizing the Argentine government to conclude this 10-year loan, the amount of which is not yet known.

It should provide relief to Argentina, which is still paying a debt of 44 billion dollars to the Fund, inherited from a previous loan in 2018.

The government stressed that the parliamentary support is a "message" to Argentina's creditors "that demonstrates maturity and greatness" and said that the agreement will be essential to consolidate the macroeconomic stabilization process, according to a statement.

In a post on the social network X, President Javier Milei welcomed the parliament's approval. The President even cancelled his visit to Israel, where he was due to address the country's parliament, scheduled for next week.

While the Argentine presidency merely confirmed the cancellation of the trip, the Israeli newspaper Jerusalem Post reported today that the cancellation was due to "internal events in Argentina".

The decree of necessity and urgency (DNU, in Spanish) signed by Milei on 11 March allows the executive to conclude a new programme of extended facilities with the IMF that will involve the granting of new loans.

The opposition expressed its disagreement with the decree because, in its view, it contradicts the law on Strengthening the Sustainability of Public Debt, approved by Parliament in February 2021, at the request of the government of then President Alberto Fernández (2019-2023).

This law, which is currently in force, establishes that "any financing program or public credit operation" carried out with the IMF "will require a law from the Honorable Congress of the Nation expressly approving it."

According to opposition sectors, the government should have sent a bill to parliament so that it could debate and approve the operation with the IMF with the approval of both legislative chambers.

Instead, Milei opted to sign a DNU, an instrument that she was able to sign on Wednesday with the approval of only one of the chambers of Congress.