Debt: The problem was never restructuring, it is the consequence

Foto Aldo Abram
Aldo Abram

NOTICIAS AGROPECUARIAS  – The market discounts that Argentina will restructure again, so it pays around $ 40 per $ 100 of the value of the bonds. Aldo Abram’s opinion.

BUENOS AIRES (NAP) At a time when a mission from the International Monetary Fund (IMF) begins to negotiate with the authorities a new financing program, it is convenient to evaluate what is the expectation that exists today regarding Argentina. The solution was never restructuring, because the problem was not the debt, but its consequence.

If we analyze the evolution of an AL30D bond, in terms of parity (that is, how much is paid compared to what it is technically worth), since its debut trading just over 50 dollars, it has dropped more than 25% to reach less than 40 dollars on November 9, levels similar to those of the restructured bonds during Mauricio Macri’s administration. In other words, those who buy and sell these securities hope that, in the not too distant future, Argentina will again have problems with its debt, restructure it and make a write-off.

Aldo Abram, Executive Director at the Fundación Libertad y Progreso, said “We warned about this at the time when the Government proposed that the restructuring of the debt should have a reduction level that would make it sustainable. For Argentina there is not a sufficient level of deduction to make the debt sustainable while governments insist on overspending ”.

“In 2001, we made the largest default in human history. But that’s not all, in 2005 and 2010, we made one of the biggest takedowns in economic history and we just restructured it again. Even if they forgive us all the debt, if the governments insist on spending more, we will go to a new restructuring ”, detailed Abram.

Immediately after renegotiating the debt, measures were applied that added uncertainty to the economy and the market understood that they were undermining property rights. The reinforcement of the stocks (“super stocks”); the attempted expropriation of Vicentin; the decree on the declaration of Information and Communication Technologies (ICT) as public services; the wealth tax and land grabbing, among others, set up an environment that investors understood to be contrary to economic sustainability.

Diego Piccardo, Economist at the Fundación Libertad y Progreso, highlighted that “prices indicate that, if we continue with the same measures that made us fail to comply with our commitments in the past, why would we go to fulfill them this time?”

“If there is not a radical, credible and sustainable change of course over time, expectations about our country will not change” and that for this it is necessary “to carry out structural reforms that generate the climate and incentives for investment in our country. country and let’s get out of permanent decline once and for all ”, emphasized Piccardo.

After renegotiating the debt, measures were applied that added uncertainty to the economy and the market understood that they were undermining property rights.
Minister Guzmán assured that after the restructuring of the Argentine debt, the economic problems that our country has dragged on for years were going to be solved. However, this was not the case. What must be borne in mind is that debt resolution was a necessary but not sufficient condition to set the country on a growth path.

It is only an opportunity to change the expectations of investors about our country, for Argentines and foreigners to place their capital in Argentina to produce and create jobs. Thus, it will be possible to have a sustained growth over time that allows offering more opportunities for progress to all Argentines. Let us hope that once again we will not miss the train and persist on the path of decline and crisis (AgroPecuarisa News).

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