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Argentine economy minister resigns to renegotiate IMF loan

BI Desk || BusinessInsider

Published: 12:14, 3 July 2022  
Argentine economy minister resigns to renegotiate IMF loan

Picture: Collected

Argentine Economy Minister Martin Guzmán, who led debt renegotiation talks with the International Monetary Fund, announced his resignation on Saturday, sparking new uncertainty in Latin America’s third-largest economy.

Guzmán did not explain why he resigned in his statement addressed to President Alberto Fernández, but called on the centre-left leader to mend internal divisions so that “the next minister does not face the same difficulties”.

“It will be imperative that you work out an agreement within the ruling coalition,” he said in a statement shared on Twitter.

His resignation comes two weeks after Vice President Christina Kirchner, a former president who has been a frequent critic of the government, attacked Fernandez’s economic management, reports Business News.

Political analyst Carlos Fara told AFP that Guzmán’s resignation was “a check mate for the president’s autonomy” and that Kirchner had the upper hand in his power struggle.

“The resignation will have a very bad effect on the markets. Even if the president and vice president reach a consensus on managing the economy, from now on everything will be under pressure from Christina Kirchner.”

As economy minister, Guzmán, 39, was tasked with renegotiating a $44 billion loan with the IMF, which Argentina insisted it could not afford to repay.

The original loan of $57 billion – the final tranche of which was rejected by Fernandez after succeeding his liberal predecessor Mauricio Macri, who pleaded for the loan – was the largest loan ever issued by the IMF.

Despite Kirchner’s resistance, Guzman managed to agree a deal and save Argentina from default.

But Guzmán often faced hostility from the Peronist Justicist party, the dominant force of the Fronte de Todos (Everyone’s Front) ruling coalition, which counts both Fernández and Kirchner as high-profile members.

Kirchner’s faction has gone after Guzman since losing control of the Senate before everyone else during last year’s midterm legislative elections.

The IMF deal was approved by parliament only thanks to the support of the centre-right opposition, after a group of legislators in the ruling coalition led by the vice president’s son Maximo Kirchner boycotted the vote.