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The silent battle that Caputo and Posse fought in Washington to obtain a disbursement of 15 billion dollars from the IMF - Infobae
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La batalla silenciosa que Caputo y Posse libraron en Washington para obtener del FMI un desembolso de 15.000 millones de dólares
El ministro de Economía y el jefe de Gabinete recorrieron los principales despachos de la administración Biden para lograr un fuerte respaldo político que le permita al Gobierno deshacer la resistencia que aún ofrece la directora gerente Georgieva y su staff para conceder los fondos extraordinarios
www.infobae.com
April 21, 2024
The Minister of Economy and the Chief of Staff toured the main offices of the Biden administration to achieve strong political support that will allow the Government to undo the resistance that managing director Georgieva and her staff still offer to grant the extraordinary funds.
By Romanian Lejtman
(From left to right) Pablo Quirno, Santiago Bausili, Luis Caputo, Gita Gopinath, Nicolás Posse and Vladimir Werning during the meeting they had with the deputy managing director of the IMF in Washington
(From Washington, United States) Luis Caputo and Nicolas Posse exhausted the main offices of Joseph Biden's administration to get Kristalina Georgieva and her staff from the International Monetary Fund (IMF) to grant Argentina an extraordinary disbursement of 15,000 million dollars destined to strengthen the reserves of the Central Bank with the final objective of opening the stocks and unifying the exchange market.
Caputo and Posse are a tandem and play by memory. Each one plays his or her institutional role: the Minister of Economy explains the foundations of the adjustment program, and the Chief of Staff explains Javier Mile i's will to advance a reform of the State that is unprecedented in forty years of democracy.
Gita Gopinath, deputy managing director of the IMF, received Posse and Caputo in an office near her office in the Fund's Head Quarters One (HQ1). Next to Gopinath were Rodrigo Valdés and Luis Cubeddu , director and deputy director of the Western Hemisphere Department of the Fund, while on the other side of the table were the president of the Central Bank, Santiago Bausili , the vice president of the BCRA, Vladimir Werning , the secretary of Finance, Pablo Quirno, and the Argentine representative to the IMF, Leonardo Madcur .
The conclave was relaxed , but Gopinath and the staff were reluctant to the combined approach of Caputo and Posse. The deputy director recognized that the goals for the eighth review - emission, fiscal deficit and reserves - were met and that the economic program went beyond her expectations .
However, Gopinath - who always reflects Georgieva's perspective - postponed until June a definition on the extra disbursement requested by Argentina to strengthen reserves and bury the stocks. Caputo and Posse had no other alternative but to smile for the tribune, in the face of a position by the IMF deputy manager that contradicts the numbers of the adjustment plan.
Kristalina Georgieva puts on headphones to listen to an Arabic-speaking journalist's question during the IMF Spring Sessions
“Look at Argentina, a country that has long been perceived as a laggard from a reform point of view, is now moving very quickly towards tightening fiscal spending, getting the ability of private investment to find a better performance. Inflation in Argentina is falling a little faster than we initially expected,” Georgieva considered during a press conference she offered to journalists covering the IMF Spring Sessions .
The statements of the Fund's managing director occurred when Gopinath put on her worst face in the face of Caputo and Posse's arguments. For this reason, the Minister of Economy and the Chief of Staff left the conclave with the deputy director somewhat irritated when her direct boss -Georgieva- maintains in public that the program flows from her conception of adjustment of the State, blender and chainsaw.
After the conclave with Gopinath, Caputo and Posse went to the Treasury Secretariat that manages the representation of the United States on the IMF board. There they met with Jay Shambaugh, Undersecretary of International Affairs, a Democratic technician with a hawkish perspective who aligns himself with Janet Yellen , Secretary of the Treasury and chief economic advisor to Joseph Biden .
Shambaugh described the reduction in inflation and the accumulation of reserves as “impressive,” and requested that the adjustment program continue with “the efforts” to protect the weakest sectors of society, in direct reference to retirees, the unemployed and the poor and destitute.
The Minister of Economy and the Chief of Staff replied that the Milei administration assumes the social costs of the adjustment plan and advanced with their objective of getting the IMF to grant Argentina a disbursement of 15,000 million dollars to shore up reserves and unify the exchange rate.
Shambaugh understood the reasons presented by Posse and Caputo, and agreed to raise the Argentine Case with Secretary Yellen. Nothing else.
Posse, Caputo and Shambaugh during the meeting at the Treasury Department
The coldness in the IMF and the Treasury Secretariat contrasted with a more comfortable climate in Biden's National Security Council and in the Central Intelligence Agency (CIA) , which Posse and Caputo visited in order to reduce the Fund's resistance to the extra disbursement.
In the West Wing of the White House, the Chief of Staff and the head of the Treasury Palace spoke with Daniel Erikson , Biden's advisor on Latin American affairs. Erikson knows the economic situation of Argentina and due to his institutional position he easily understood the urgency of the Milei administration to obtain the 15 billion dollars that he requested from the IMF.
Unlike forces of power such as the IMF and the Treasury Secretariat, which move between red lines drawn by cold indices and statistical data, in the National Security Council political calculations are made and geopolitical strategies linked to the global interests of USA.
From this perspective, if for the White House the Milei project positions it as a regional ally, it is essential that the economy flows to prevent a hazardous social situation from swallowing up the Libertad Avanza project.
Argentina defends in totum the United States agenda in Latin America, confronting the diplomacy of Brazil, Mexico, Colombia and the authoritarian regimes of Cuba, Nicaragua and Venezuela. And this defense and harmony, Posse and Caputo argued before Erikson, requires that the adjustment program accelerate without major setbacks.
Nicolás Posse, William Burns and Luis Caputo met at CIA headquarters in Langley
Following the meeting with Erikson, Posse and Caputo crossed the Potomac River from Washington and arrived in Langley to meet William Burns , director of the Central Intelligence Agency. Burns is the most influential official in the Biden administration, and his opinion weighs on the President of the United States' decision-making.
Posse already knew Burns - he saw him in DC and in Buenos Aires -, while for Caputo it was the first time he entered the world of spies, smoke and mirrors . The CIA director listened carefully to Posse's proposals and Caputo's technical explanations, and promised to take the matter to the Oval Office.
The Chief of Staff and the Minister of Economy took advantage of the IMF Spring Sessions to push an objective that is very important for the adjustment plan. They took away the reluctance of the IMF, the apparent lukewarmness of the Treasury Department, and the political will of the National Security Council and the CIA.
During the G7 summit in June, Milei and Biden will meet under the Italian sun. It's there, or never.
