IMF: Alberto Fernández was backed by Joseph Biden to prevent Argentina from falling into default today

Joseph Biden's administration made a political bet with Alberto Fernández's government and played its power on the board of the International Monetary Fund (IMF) to prevent Argentina from falling into default due to the non-payment of $2.8 billion due between now and tomorrow. The White House learned about the maneuvers carried out by La Campora and the Patria Institute during the parliamentary discussion of the agreement with the IMF, and chose to support the President against Cristina Fernández de Kirchner.

The agreement signed between Argentina and the Fund establishes a first disbursement of $9.8 billion. And that disbursement was to cancel a debt of $2.8 billion that was due on Monday 21 and Tuesday, March 22, 2022. These terms were signed by Mauricio Macri when he contracted a Stand-By loan for $45 billion in 2018.

If the government were not fractured, the agreement with the IMF would have been sanctioned in Congress during the first ten days of March. But La Campora, the Patria Institute, CFK and Máximo Kirchner did not support the terms of the negotiation designed by Alberto Fernández, and the parliamentary discussion was hopelessly delayed.

Martín Guzmán commented on these political circumstances to Kristalina Georgieva, managing director of the IMF, and described a possible succession of credible events: if the board did not meet on March 18 to approve the agreement, and then did not turn $9.8 billion in Special Drawing Rights (SDR, s) , Argentina fell into default on Monday, March 21.

Georgieva knows the bureaucratic logic of the directors who make up the Fund's board, and in a few words she told Guzmán that a meeting on March 18 was impossible to endorse the Argentine case.

That is to say: without a board there is no disbursement, and without disbursement, Argentina entered default due to non-payment.

The Minister of Economy informed the President about the economic and financial difficulties ahead, and from that moment on a time-trial solution was sought that should have a legal solution and a direct endorsement by the White House. The United States controls the IMF board, and without its support nothing exists in that Ivory Tower.

Guzman ordered a review of the decisions of all IMF boards, while Jorge Arguello - ambassador to Washington - contacted Jake Sullivan, Joseph Biden's national security adviser. If Sullivan got involved in the Argentine case, there was a chance to avoid default with its dystopian consequences.

Biden's adviser - who barely sleeps because of the illegal war Russia is waging in Ukraine - listened to Arguello's arguments and made himself available. It was not a pious act: The White House distrusts Cristina and her political agenda, and bets on Alberto Fernández to keep La Campora and the Patria Institute as far away from the first floor of Balcarce 50 as possible.

Sullivan obtained political authorization from Biden and then spoke to Georgieva. The President of the United States did not want Argentina to fall by default and the Fund's board had to do what was necessary to help the Peronist administration. The managing director took on the message that came directly from the White House and went to work with her technical staff.

Last Thursday, Alberto Fernández was in Salta. Arguello called him from Washington and told him that the situation was starting to get on track. At that same time, the Senate was debating the agreement with the IMF and Cristina counted the hours to leave her office and make explicit her political break with the head of state.

A day later, Friday, March 18, Guzman had a long conversation with Georgieva. He had found a legal argument to postpone payments without falling into default, and he needed to coordinate communication to avoid shocks on the political scene and in the financial city.

The Minister of Economy asked the managing director that a possible IMF statement should state that Argentina did not fall into default if it did not pay on Monday, 21, that the board would meet without delay to approve the agreement, and that everything could be paid together ( $2.8 billion) before the end of March.

Georgieva said yes.

Guzman cut off communication with Washington, got into the official car and left for Olivos. Alberto Fernández received him alone in his office and together they analyzed the latest developments related to the Fund. Not only did they have the agreement approved in Congress, but the IMF also agreed to postpone payments until the first disbursement came.

In DC, Arguello thanked Sullivan for his efforts to Biden and Georgieva. Without the support of the White House, Argentina now fell into default.

The President has already learned that foreign policy has a tacit and inviolable norm: Quid pro quo.

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