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The Economist from Riyadh
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A deadline set for Argentina to reach an agreement with its international creditors to restructure its debt and avoid default is over, Friday without any formal announcement, but negotiations continue until May 22.
The center-left government led by Alberto Fernandez set the mid-April deadline, while Economy Minister Martin Guzman said only to reporters that “part of our creditors accepted our offer and Argentina continues the dialogue.”
According to “French”, Hernan Lecher, director of the Argentine Political Economy Center, said in statements that “the next bond maturity is May 22, and Argentina cannot be counted in default (if the payment is not paid) unless the payment is made by that date.”
A senior government official, speaking on condition of anonymity, said that Argentina has “ten difficult days” but the government is “optimistic because many say the offer is completely logical”, adding: “We will do what we can to find a solution without mortgaging the present and future of the Argentines.”
For its part, Kristalina Georgieva, Managing Director of the International Monetary Fund, told reporters that there is still time for ongoing negotiations.
On April 22, Argentina defaulted on the payment of $ 500 million related to its debt, noting a month-long amnesty period pending the creditors ’response to its offer, as negotiations related to the restructuring of $ 66 billion of bonds issued under an international jurisdiction.
The Buenos Aires offer provides for a 62 percent discount on its interest rate, or $ 37.9 billion, and 5.4 percent of the capital, equivalent to $ 3.6 billion. It also requested that the debt be suspended for three years, which means that no amount will be paid until 2023.
Three major groups holding the bonds have so far rejected the proposal, saying it is paying international creditors unequal losses. Despite this rejection, the government kept its offer, as Economy Minister Martin Guzman said he was open to any counter proposal, provided that he respected the boundaries of what was considered viable.
The Nobel economists, Joseph Stiglitz and Edmund Phelps, supported by more than 135 leading economists, on Wednesday called on Argentine creditors to accept the “responsible” government offer, stressing that debt relief is the only way to combat the epidemic, and put the (Argentine) economy on a sustainable path.
Argentina has been in recession for two years and imposed on March 20, quarantine measures with the spread of the Corona virus emerging in all countries, and this country located in South America had witnessed in 2001 the largest default in the payment of a debt in the history of $ 100 billion.
In a separate context, Argentine President Alberto Fernandez said that it was decided to extend the measures of sanitary isolation in the capital, Buenos Aires, until May 24, while reducing them in the rest of the country.
Fernandez said in a televised speech yesterday, that the general isolation that aims to prevent the spread of the virus and was scheduled to end today, will remain in effect in the capital and its suburbs, stressing that he is “very proud” of the Argentines for their adherence to the strict rules of social isolation, which he said helped the government to Achieving its goal of declining cases of injury and death.
Argentines have kept their homes since the start of the general sanitary isolation on March 20, but last month they were allowed to walk for short periods outside their homes during the day. Buenos Aires mayor Horacio Rodriguez Larrita said that children will now be allowed to go out to exercise with their parents on weekends.
And the authorities imposed public isolation on Argentina seven weeks ago and extended it three times before, and Argentina recorded as of Friday 5611 confirmed cases of Corona virus and 293 deaths.
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