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Myriam Bregman: Argentina’s Agreement with the IMF is a “New Colonial Pact”

In an interview with one of Argentina’s leading daily newspapers, Myriam Bregman — a member of the country’s Congress and a leader of the Left Front–Unity — criticized the current president for “legitimizing the scam perpetrated” by the former administration and proposed a “sovereign nonrecognition” of the foreign debt.

Pedro Lacour

February 19, 2022
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Myriam Bregman: “Máximo Kirchner’s Resignation Confirms That the Agreement with the IMF Is a New Colonial Pact”

Myriam Bregman rejects the argument that there are no alternatives to the path of “subjugation” and “co-government,” on which, in her opinion, Argentina embarked when it first signed an agreement with the International Monetary Fund (IMF). The lawyer and national deputy for the Left Front-Unity (FIT-U) argues that the understanding reached by Minister of Economy Martín Guzmán with the IMF, led by Kristalina Georgieva, simply constitutes “a legitimization of the scam perpetrated by [former president] Macri’s administration.”

“They’re not going to convince us that all that’s left for us to do is to bow our heads,” says Bregman in an interview with La Nacíon, in which she explains that she interpreted Máximo Kirchner’s resignation as the head of the ruling party bloc as a symptom: “It confirms that the agreement with the IMF is a new colonial pact and also exposes the Kirchnerist party’s huge limitations when it comes to presenting an alternative solution to the crisis.”

In the face of a seemingly inevitable situation, her proposal is to move toward the “sovereign nonrecognition” of the foreign debt, based on what is referred to as the “odious debt doctrine” in international criminal law. She describes it, however, as a measure that “should not be taken in isolation,” but in conjunction with mechanisms preventing capital flight, such as the “nationalization” of the banking system and foreign trade.

This position is shared by the group of FIT-U legislators in the lower house, whose four members have already announced that they will reject any multiyear plan submitted to Congress by President Alberto Fernández. At the same time, they have announced that they do not plan to leave the streets. Last February 8 they held a massive rally at the Plaza de Mayo against the payment of the foreign debt.

The government and the IMF have finally reached an initial agreement after two years of negotiations. How do you interpret it on the Left?

It was only a negotiation in form, because the IMF managed to impose most of the conditions that it wanted for Argentina, and the government agreed to pay. The president made it clear in his announcement that there will be a devaluation, that they’re going to reduce the deficit and apply more austerity measures. That’s what the IMF intended from the beginning. The resulting situation remains to be seen.

Would you say, then, that the IMF managed to twist the government’s arm?

No. What Alberto Fernández has just done is legitimize and ratify the scam perpetrated by Macri’s administration, which he has never questioned. Since he took office, the president has rejected any other possibility and has chosen the path of an agreement. And that’s what the agreement means: submission to the IMF’s dictates. It is also important to note that this will result in a co-government with the IMF, because not only is the IMF demanding austerity measures, but it will also be monitoring all aspects of the country’s policies.

Máximo Kirchner’s resignation as head of the ruling party bloc seems to indicate that the Kirchnerist party finds it impossible to accept what the president has announced, which is a far cry from the act of “sovereignty” that they had declared when the debt to the IMF was paid off in 2005.

Máximo Kirchner’s resignation confirms everything we’ve been denouncing: the agreement with the IMF is a new colonial pact and will result in the adoption of harsh austerity measures against working people. It also shows the huge limitations of that sector when it comes to presenting an alternative solution to the crisis. Because what the Kirchnerist government did, in fact, in 2005 was to legalize the debt. In the name of sovereignty, they paid for one of the many scams perpetrated by the IMF, which was the debt acquired during the dictatorship. It was actually not a debt, but a scam and a mechanism of domination. Yes, they paid it off, they freed themselves circumstantially from the IMF’s tutelage, but at the same time they established a very regressive idea politically, which is that debts must be paid, no matter what. And they trained thousands and thousands of activists in these ideas, people whom they influence politically.

Even so, the government celebrated that the country’s growth will not be affected and that this will open doors to new financing.

None of this is guaranteed if we take into account that there will be 10 quarterly reviews in the next two and a half years. I don’t believe that this will lead to stability or that it’s the solution to Argentina’s serious problems. I also don’t believe that the government will be able to meet all its payment obligations between now and the end of the agreement, because the economic situation will hardly benefit from this.

In fact, Guzmán agreed with the IMF on a fiscal deficit for this year that is lower than the percentage that he had included in the failed 2022 budget.

That’s a clear sign that the measures that they are forcing them to take will push the economy toward a recession. And the quarterly audits will mean that whenever the Argentinean government wants to raise important issues, the IMF will probably veto their proposals. Suppose that they intend to increase the budget for education. Will the IMF let them increase the allocations? How are they going to solve, for example, the very serious public services problem that Argentina is facing today? The government says that it will increase rates, but not that investments will be increased or that it will be possible to discuss the privatizations of [power companies] Edenor and Edesur, which have proven to be a catastrophe.

In early January, Minister of Economy Martín Guzmán said that he envisioned “a good agreement,” but he clarified that this was “in relative terms.” It seems that he was already preparing people for what could come.

Well, it’s no coincidence that we’re in this situation now. This was a political decision. Macri left behind a terrible, catastrophic situation, but the Everyone’s Front [the ruling coalition of Kirchnerist and Peronist parties] rejected all possible courses of action except one: the agreement with the IMF, which has just been reached. The opposite course of action would have meant opposing 40 years of policies imposed by international financial capital, which have led to the subjugation of several countries and to the idea that debts must be paid at any cost. This understanding, which is not a debt restructuring plan as they tried to sell it at the beginning, but a refinancing plan, clearly shows that the debt is being paid off with new debts that will result at an even greater level of submission than with the previous debts. That’s why, no matter how much you pay, the debt never goes down. The IMF wants to not only collect payments but also impose certain political conditions on the country.

Did Alberto Fernández waste time in these negotiations?

No, he decided this. The government chose this path in the context of the exceptional situation of the pandemic. Because if anything allowed them to question the huge debt left behind by Macri’s administration, it was that they needed to deal with other priorities. But they never doubted that their priority was to reach an agreement with private investors and to pay the debt to the IMF, not dealing with the pandemic, as Cristina Kirchner herself acknowledged. From the start, they accepted that this was the only possible strategy, despite having all the tools — not only politically, but also legally — to take a different course.

What could Argentina have done differently?

Alberto Fernández had all the tools he needed. He could have come together with other countries in the fight. Not to mention using mass mobilizations. But he didn’t take the political path or the legal path. On the contrary, from day one he said that he was going to pay. So then they ended up legitimizing the scam last week, rejecting any alternative, silencing those of us who criticized him, telling us that we were irresponsible, that Guzmán was a friend of Joseph Stiglitz and that the IMF had changed. The arguments they used were quite similar to those used by Macri to justify the same thing.

So do you believe that this administration’s policies are a continuation of the policies of the previous one?

Yes. Cristina chose Alberto to go to the IMF and accept this subjugation, which, as we have been pointing out, is a path that we have gone down before. Argentina arrived at this situation of decline not because it challenged the IMF, but because it complied with all of its demands. And in that process, since the dictatorship there has been a 42-fold increase in the country’s foreign debt in dollars. They’ve paid $600 billion and still owe $300 billion. Poverty has increased from 4 percent to 40 percent. Wages dropped by a half since the mid-1970s. So the results of complying with the IMF are quite clear.

There is a general consensus that not reaching an agreement would have been worse.

We are well aware of what could happen if we refuse to pay the IMF. We know that breaking with the IMF would lead to attempts to get a massive amount of dollars out of the country. But they’re not going to convince us that the only thing left for us to do is bow our heads. That’s why we say that what we need to do is move toward the sovereign nonrecognition of the debt. However, that measure shouldn’t be taken in isolation, but as part of a set of measures that would begin by nationalizing the banking system and foreign trade. Because without those policies to prevent capital flight, the country would be completely unarmed in its fight against global financial groups, which will obviously attempt to twist our arm, as they’ve always done, so that we will give in to certain conditions. We know that this would mean implementing a completely different program from the one adopted by the government, which said two years ago that it was going to put an end to the legacy of Macri’s administration, that it was going to recover what had been lost, but instead chose to go down the same path.

What would the sovereign nonrecognition of the debt involve?

There’s an aspect that we can’t ignore, which is that the debt has not been investigated or judged, or seriously considered at any time. All the government did was file a lawsuit, which was what we lawyers call a gesture for the public. It’s clear that the agreement that Macri signed with the IMF was totally illegal and that it didn’t comply with the minimum standards in force at the time of its execution. In this case, Argentina can apply what is referred to as the “odious debt doctrine” in international criminal law, according to which foreign debt acquired and used against the interest of the majority, knowingly by those who granted it, does not have to be paid, nor can the repayment obligation be enforced, and it is therefore null and void. Countries like Mexico and the United States have used it before.

Was this the policy applied by Ecuador in 2008?

In Ecuador’s case the debt was investigated, which is the first step on the path to sovereign nonrecognition, which we in the Left Front propose. Although Rafael Correa ended up giving in, what Ecuador’s case shows is that if a decision is made to investigate the debts, they can be annulled. This is what happened in Argentina with the Olmos case [an investigation that began with a claim filed by journalist Alejandro Olmos in 1982, resulting in a ruling by former federal judge Jorge Ballesteros on Argentina’s foreign debt], which showed that almost 500 irregularities were committed during the dictatorship, 477 offenses linked to the debt, from 1976 to 1982.

One could argue that this was a debt acquired by a nondemocratic government.

Yes, but in response you could say, as I mentioned before, that the government of Cambiemos [Macri’s administration] reached an agreement with the IMF that violated all applicable legislation, beginning with the Constitution itself. This was already analyzed in 2018 in a ruling by Judge Julián Ercolini, in which Macri was released from any liability for reaching an agreement with the IMF without consulting Congress. The Constitution requires that, if an agreement is reached, it should be explicitly stated. However, Judge Ercolini justified his ruling based on a section of [former president] Menem’s Financial Administration Law, which states that the legislative branch delegates powers to the executive branch and that, if the country was already a member of a certain body, the president could sign agreements without consulting Congress. The fact is that in 1994 the Constitution was reformed and a term was established for all delegated powers that were not expressly ratified to expire. That term ended around 2010. So what happened then? With great legal creativity, Ercolini indicated that, since that law had been published in a legal digest in which laws are compiled, that showed that the intention was for the law to remain in force. So he requested a report from Congress, which replied that it was never approved in the legal digest. A total embarrassment.

What approach will the Left use in the debate on the multiyear plan in the lower chamber of Congress?

The multiyear plan has a clear objective, which is to pay the IMF. So I can tell you right now that we are going to reject it. We have a completely different program, which prioritizes the recovery of pensions and salaries, which we believe is urgent. We want to discuss the reduction of the working day to six hours without affecting wages and to demonstrate that a million jobs could be created in the state and large companies alone. In addition, we want to discuss the environmental agenda, not the extractivist agenda. All the laws submitted by the government during special sessions will only expand the area used for soybean production, with enormous concessions for the sectors that most profited during the pandemic, like oil and agribusiness. The aim of all this is to get enough dollars to pay the IMF.

Will you continue the street demonstrations against the payment of the debt, like the one that was carried out last week at the Ministry of Economy?

Yes, we will come out again on Tuesday, February 8. We view mobilizations as an essential tool, which should include all unions, all social movements, and all those who are critical of the agreement today. The group that we are a part of, Left Front-Unity, which also includes 200 other organizations, is a leading independent force that proposes that we break with the IMF and refuse to pay the debt, in addition to challenging the policies that have been put in place so far by Alberto Fernández. Because it’s no longer December 2019 [when Fernández was elected], but February 2022. And we believe that that’s precisely the strength that we get from mobilizing: being able to present our agenda on the streets, which is what we ultimately aim to do. We want the voice that we represent in Congress to be the voice of the demands that are made there.

Originally published in Spanish on February 1 in the Argentinian newspaper La Nación.

Translation by Marisela Trevin

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