Connect with us

Latest

News

Squeezing the turnip: Argentines protest IMF, austerity measures

Argentina appears to be on the road to getting the IMF treatment 2.0, and the people are taking to the streets over it.. 

Published

on

1,188 Views

Argentina appears to be on the road to getting the IMF treatment 2.0, and the people are taking to the streets over it..Radio Havanna reports:

Thousands of Argentineans marched in Buenos Aires on Thursday against the economic policies of the administration of Mauricio Macri and an announced deal with the IMF, the International Monetary Fund. Organizers of the protest said that the government will undoubtedly worsen the economic situation in the country and put in danger Argentina’s peso currency.

Under a driving rain, protesters from progressive organizations and unions carried banners and waved flags. Secretary-General of the Association of State Workers, Hugo Godoy, sounded defiant as he spoke out against the government policies. He said: “To the workers: they will not stop us, nor the storm and because we workers are not going to to permit this Congress to accept the interference of the International Monetary Fund, the increase of tariffs or the labor reform. We are going to fight until the end so that those infamous resolutions of the government of Macri are turned back. The workers have a memory. We know that policies like these led us to hell and we will not allow it.”
Macri and IMF Managing Director Christine Lagarde announced on Tuesday they were opening talks for a financing deal after Argentina’s peso currency touched a new low of 23.5 to the dollar, despite tighter fiscal measures and hiking interest rates up to 40 percent in Latin America’s third-largest economy.

On Wednesday, the Treasury Ministry announced it would seek a “stand-by deal” from the IMF, a type of financing that would likely require more conditions and orthodox policy reforms than a Flexible Credit Line (FCL), such as the more so-called stable economies of Mexico and Colombia have.

Argentines remember the last the time the IMF ‘helped’ them. Last time, measures adopted in connection with assuming a loan from the International Monetary Fund resulted in 1 in 5 joblessness, millions of people plunged into poverty, and strict austerity measures. Right now, history appears to be repeating itself, as President Macri has announced that he is seeking credit from the international lender. The AP reports:

BUENOS AIRES, Argentina (AP) — It seemed like a collective moan could be heard across Argentina as President Mauricio Macri uttered three words that many in this country associate with the worst of times: International Monetary Fund.

Macri surprised Argentina by announcing this week that he will seek a financing deal with the IMF following a sharp devaluation of its currency and a tough global outlook. The move has brought back bad memories for Argentines who blame the IMF for encouraging free-market policies that led to the country’s worst economic crisis in 2001.

“Historically, the image of the IMF has been something very traumatic for us Argentines,” Jorge Fidler, a 72-year-old accountant, said of the economic crunch, which included government turmoil with five presidents in just two weeks. “This really is a bitter pill to swallow.”

The crisis 17 years ago resulted in one of every five Argentines being jobless, millions sliding into poverty and some reporting going hungry. The peso, which had been tied to the dollar, lost nearly 70 percent of its value.

Banks froze deposits and put up sheet metal barricades as thousands of protesters unsuccessfully tried to withdraw savings. At least 27 people died in protests and looting in December 2001 as South America’s second-largest economy unraveled.

Blame has been heaped since then on the IMF for its role in Argentina’s debt default of more than $100 billion. A survey by Argentine pollsters D’Alessio Irol/Berensztein said 75 percent of Argentines feel that seeking assistance from the IMF is a bad move. The survey of 1,077 people in early May had a margin of error of three percentage points.

“The IMF is the last instance lender. It’s a quasi-toxic word here,” Sergio Berensztein, a political analyst and co-author of the poll, told The Associated Press. “It’s like when you go to the dentist. You might need it, but you don’t want to go.”

In a nationally televised address, Macri said he had begun talks with the IMF as a way to combat economic woes at home and a complex situation worldwide, including rising interest rates, higher oil prices and a depreciation of emerging market currencies. A week earlier, the Argentine peso hit a historic low against the U.S. dollar and prices for Argentina’s bonds sank.

Still, the decision to reach out to the IMF for loans to shore up government reserves and dampen currency pressures caught many off guard. Just a year ago, Argentina was still a darling among investors. The government sold out an issue of 100-year bonds taking advantage of a low interest rate.

Many people spoke then of an economic miracle and said Macri was practically guaranteed re-election after his coalition scored a decisive victory in congressional elections. Now, the opposition has been emboldened and Macri’s political future seems more unsettled than ever.

What happened?

“There was a lot of optimism and financial markets were looking for any kind of yield anywhere. And any country which looked on the right path, and Argentina certainly did, was attracting a lot of attention and money,” said Monica de Bolle, senior fellow at the Peterson Institute for International Economics.

She said that after Macri took office in 2015, he was able to accomplish a lot quickly. He resolved a longstanding legal dispute with creditors that returned Argentina to the global credit markets for the first time since its record default during the 2001 disaster. He removed currency controls and other economic distortions, and he ordered the government to publish credible statistics, which had been disputed by the IMF and local analysts under his predecessors.

“It helped to give the sense that Argentina is moving forward,” De Bolle said. “I don’t think markets were wrong — they might have been overly optimistic, but so was the government.”

Macri’s government said from the start that gradual austerity measures were needed to revive Argentina’s struggling economy. He cut red tape and tried to reduce the government’s budget deficit by ordering job cuts and cutting utility subsidies, which sparked labor unrest.

When his Cambiemos (Let’s Change) coalition scored a triumph in the midterm elections, Macri said he would seek even deeper changes in tax and labor rules. But Argentines continued to lose purchasing power from high inflation and many were frustrated with rises in fuel and transportation costs.

Argentina has long had one of the world’s highest inflation rates. Macri, a pro-business conservative, had promised to curb consumer prices, which estimates say rose up to 30 percent a year in 2015 under his left-of-center predecessor, Cristina Fernandez.

Then in December, officials announced a rise in the inflation target, causing investors to begin doubting Macri’s commitment to taming price rises.

Meanwhile, the peso slumped against the dollar as rising U.S. interest rates lured investors to pull money out of Argentina and put it in the U.S. That caused jitters among Argentines, who are used to stashing away dollars as a cushion since the 2001 crisis. Macri’s government was forced to impose three interest rate hikes and tighten the fiscal deficit target.

Despite central bank intervention and talks between Argentina and IMF officials that opened Thursday in Washington, the peso hit a new all-time low of 24.50 on Friday afternoon. Argentina’s treasury says it is seeking a stand-by deal, but the amount and terms have not been disclosed.

David Malpass, the U.S. treasury undersecretary for international affairs, said Thursday that he welcomed the talks to promote “growth and market reforms” in Argentina.

But for many Argentines, it spells the contrary. A local TV channel ran a banner this week reading: “Back to the future.” In Congress, opposition lawmakers protested by putting large signs on their desks proclaiming: “Out with the IMF!”

The international lender has admitted that it had a made a string of mistakes that contributed to Argentina’s economic implosion. A 2004 report by the IMF’s internal audit unit concluded it failed to provide enough oversight, overestimated growth and the success of economic reforms, while it continued to lend Argentina money when its debt burden had turned unsustainable.

“The IMF did not press the authorities for a fundamental change in the policy regime and in December 2001 effectively cut off financial support to Argentina,” the report said.

Without further IMF support, the government was forced to declare the largest sovereign debt default in history.

Many Argentines still blame the IMF for permissive and heavy lending that led to devaluation of the peso and the debt default.

“It’s very sad,” said Soledad Patane, 29, a university student in Buenos Aires. “What they do is indebt a country until that country can no longer pay the debt and it becomes an indirect colony of those countries that continue to lend us money.”

De Bolle, who worked at the IMF in the early 2000s, finds such sentiments understandable, but she says the international lender has changed radically since Argentina’s crisis. She said it has loosened policy prescriptions that forced austerity on borrowing nations and now puts more focus on inequality and social issues.

“It was nearly 20 years since the fund was involved with Argentina,” she said. “That’s a long time. It’s now a different institution.”

The government’s action comes after a protest of massively increased utility tariffs of over 500%, which was protested by a popular blackout, and a 40% interest rate jump.

These austerity measures intend to squeeze more money out of the economy while the government contributes less, which invariably means that consumer activity will slow down, leading to less received in taxes and more people losing jobs as the economy adjusts to less consumer spending in compensation for higher bills.

Liked it? Take a second to support The Duran on Patreon!
Advertisement
Click to comment

Leave a Reply

avatar
  Subscribe  
Notify of

Latest

Russia’s economy continues to outperform as gold takes center stage (Video)

The Duran Quick Take: Episode 118.

Alex Christoforou

Published

on

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris examine how US and EU sanctions have continued to provide a huge boost to Russia’s economy. Russia’s food sovereignty has practically been achieved, as the Russian central bank continues to buy gold and lower its exposure to western financial markets.

Remember to Please Subscribe to The Duran’s YouTube Channel.

Follow The Duran Audio Podcast on Soundcloud.

Via TASS…

Outside pressure in the form of sanctions has become an incentive to resolve various issues of Russia’s economy, Russian Security Council Secretary Nikolai Patrushev stated in an interview with the Izvestiya daily.

He noted that through introducing sanctions against Russia, “the West aims to destabilize Russia’s economy and to create social and political tensions in society.”

“But during the difficult times, Russians have always stuck together and mobilized their resources in order to ensure the country’s sovereignty. This is what is happening now – the outside pressure has become an incentive to resolve many problems in Russia’s economy,” he said.

“Before the sanctions, it seemed that we would never be able to feed ourselves and that we are doomed to be dependent on Western import. However, right now, Russia’s food sovereignty in crucial sectors has practically been achieved, and in some areas, Russia has become the leading exporter,” Patrushev noted.

Those who apply the sanctions “can see that they (the sanctions – TASS) are ineffective and often achieve the opposite goal,” the Russian security chief concluded.

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

Latest

US Neocon Foreign Policy and the War Waged Against Serbia

The Serbian assault began first by a ‘financial war’; by sanctions and finished off by an aggressive unprovoked incessant NATO bombing campaign.

Richard Galustian

Published

on

The ‘witch-hunt’ against President Trump over Russian collusion has officially ended, following the submission of the Mueller Report, enabling us to now focus on the real problems of America that effects the whole world.

In the hope of a waining of the Russophobia in America, let’s look at the US’s recent war history by starting with the 20th anniversary this month of the NATO war on Serbia in 1999 which amounted to almost 100 days of bombing of historic cities and infrastructure.

Firstly, these problems are, in the main caused by the Neocons, or Deep State, whatever you wish to call them, and the continuing promotion, by the US Military-Security Industrial Complex, of wars and regime change and secondly, Trump’s unreserved support for Israel, regardless of war crimes they may continue to commit against the Palestinians.

Incredibly after that one sided unjust and illegal war that NATO executed, NATO has the audacity to invite Serbia to join it! Something that will never happen. What do they smoke in DC, in the Pentagon and Brussels based NATO?

To compound these overall problems, the US Military and Israeli Defence Forces collaborate on these US regime change policies on all continents evidenced most recently by the arrival of crack Israeli troops last month in Brazil, prepared to support an attack potentially by Brazil and Columbia on Venezuela.

As, has now come to be expected, America pursues its Venezuelan regime change with full main stream media (MSM) cooperation, using well proven sophisticated propaganda techniques along with a variety of pretexts.

From Serbia to Iraq to Libya, where does it end? Observe that Trump is now seeking a ‘NATO alliance’ offering NATO status, to President Bolsonaro of Brazil to back the invasion of Venezuela.

So it is important to remember, as an example, that after a long war of economic and financial destabilization ended with the bombing of Serbia.

Serbia was previously a part of Yugoslavia, a country which had successfully evolved after 1945 to solve the old rivalries of the 19th and early 20th Century Balkan ethnic animosities which was, prior to the advent of power of President Tito, its past history.

The United Nations, instead of supporting, in effect, so called ‘humanitarian wars’ and ‘regime change wars’ by the US, using NATO, helped and relentlessly driven home by MSM outlets like CNN and FOX NEWS into people’s heads, must finally take a stand.

So too, Yugoslavia, once the envy of many in the world, given its then ‘non-aligned’ status under President Tito, was destroyed and broken up; ‘Balkanized’ in the early 1990s.

The Serbian assault began first by a ‘financial war’; by sanctions and finished off by an aggressive unprovoked incessant NATO bombing campaign. That’s what we can expect in Venezuela next.

This ‘Balkanization’ strategy similarly applies to Afghanistan, Iraq, Libya, Syria et al. It serves US Neocon interests to dismember States in the world and create smaller more ‘manageable’ countries.

‘Regime change’ runs against the intent, the very words contained in the US Constitution. No one in MSM ever reminds us of that fact. Nevertheless America’s ambition to overthrow other States continues, which they arrogantly now make no secret of. The next States will probably be Nicaragua then Iran to name but two.

A very noteworthy most recent outrageous unilateral declaration was made by President Trump, not yet formally agreed by US institutions, ‘giving’ something he has no authority to give; Syrian territory, the Golan Heights to be precise, to Israel. Something that one day could trigger a full scale Arab-Israeli War.

This is of extreme importance yet no real outcry comes from world leaders; well not so far.

The main reason for that decision given by senior US Administration figures is that “God anointed Trump to save the Jews”.

Not forgetting Trump’s need (which we the people don’t understand exactly why) to support Prime Minister Netanyahu in his difficult upcoming elections in Israel – in part because both countries failed to ‘regime change’ Syria – but more importantly to help the ‘financial terrorists’ who formed a company jointly that has already started drilling for oil in the Golan Heights. You might like to know who owns such oil drilling company which should answer a plethora of questions in one go that you must be asking yourselves.

The shareholder’s names tells us everything; Dick Cheney; Baron Rothschild and Rupert Murdoch. The titular heads of neocons, bankers and media on the planet.

In ending there is no more evidence required for us, the people of the world, to rise up against the globalist dark forces wherever they exist, be it in Brussels, London, France or Washington. We must demand democratic elections or start revolutions, the latter has already begun in France in the form of ‘the yellow vests’. And Brexit, by definition, is a rejection by the British people of globalism and American Hegemony.

The pattern of US destabilization and destruction of States to loot them of their sovereign resources is the unseen history of the last 100 years, not taught in any university, anywhere in the West.

As far as Ukraine is concerned, its government was taken down by the CIA and replaced by an ultra fascist regime that has full backing from America. This is no secret. But the MSM simple don’t report it.

US led NATO is ‘the transnational war machine’ of the world, devouring almost all free countries wealth. It can extort to terrorize all into conformity to the global ‘carcinogenic’ US Neocon imperialistic strategy.

A total estimated 20m people around the world have died since the end of WW11 at the hands of US Forces. Think about that for a moment.

One of the most famous sayings attributed to America’s great President Abraham Lincoln is about deception: “You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time.”

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

Latest

‘Dark day for internet freedom’: EU approves controversial copyright reform

Julia Reda, a German MEP with the Pirate Party, described it as a “dark day for internet freedom.”

RT

Published

on

By

Via RT


The European Parliament has voted to adopt the highly controversial Article 13 provision which would govern the production and distribution of content online under the auspices of increasing copyright protections.

Tuesday’s move will update the EU’s 20-year-old copyright rules and will govern everything from audiovisual content to memes, much to the dismay of many social media users who have already begun outpouring their grief online.

MEPs passed the legislation by 348 votes to 274 Tuesday. Opponents had hoped for last-minute amendments to be made but their efforts were in vain.

Julia Reda, a German MEP with the Pirate Party, described it as a “dark day for internet freedom.”

Article 13 or ‘The Directive on Copyright in the Digital Single Market’ makes all platforms legally responsible for the content hosted and shared on their platforms.

The process of updating the bloc’s copyright laws began in the European Commission two years ago, ostensibly to protect Europe’s publishers, broadcasters and artists and guarantee fair compensation from big tech companies.

By essentially forcing companies like Google, Facebook and Twitter to pay artists and publishers for the reproduction of their work online, include in meme format, the EU is effectively clamping down on online memery.

The onus will now be on tech companies to clamp down on content-sharing on their platforms, which will likely ensure yet more draconian policing of speech and content.

EU member states now have two years to pass their own laws putting Article 13 into effect.

Tens of thousands marched in protest across Germany ahead of the vote, decrying what they viewed as severe online censorship.

Tech giant Google said that while the directive is “improved” it will still lead to legal uncertainty and will damage Europe’s creative and digital economies.

Critics have argued that the only way for Article 13 to be effectively enforced would be through the use of upload filters which automatically check content to see if it’s copyrighted or not, at least in theory. However, the exact mechanics of such a system have yet to be fully debated and the potential for abuse is immediately clear.

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

JOIN OUR YOUTUBE CHANNEL

Your donations make all the difference. Together we can expose fake news lies and deliver truth.

Amount to donate in USD$:

5 100

Validating payment information...
Waiting for PayPal...
Validating payment information...
Waiting for PayPal...
Advertisement

Advertisement

Quick Donate

The Duran
EURO
DONATE
Donate a quick 10 spot!
Advertisement
Advertisement

Advertisement

The Duran Newsletter

Trending