Venezuela, Costa Rica and Argentina are three nations that suffer due to their massive debt with foreign banks.
Countries all over Latin America are running out of time to curb, once and for all, their growing public debts and fiscal deficits, yet, none of those countries seem to know, or simply refuse to recognize, that the largest source of debt slavery is foreign loans from supranational banking cartels.
Venezuela, Costa Rica and Argentina are three of those nations that suffer their massive debt with foreign banks. Their governments refuse to address the fact that massive public spending programs, which they implement to bribe the poor and middle classes, is driving debt through the roof. Instead, they continue to postpone the reduction of debt slavery their citizens have fallen into as a result of the so-called welfare state, an imaginary entity that, politicians allege, bring prosperity to the masses.
Argentina pressed the red button of the IMF. The unpopular decision of President Mauricio Macri, announced a month ago after the abrupt devaluation of the peso was enacted Thursday.
The board of directors of the financial institution approved a stand-by credit line for $ 50 billion that Argentina will have access to over the next three years.
In return, Macri commits to much stricter fiscal objectives than the gradual ones set upon assuming power, for which he will cut public spending by $19,5 billion. When explained in simple terms, Argentina will become Greece. The bankers will owe most of the country’s resources and infrastructure, as supposed to Argentinian people themselves.
The IMF’s financial bailout of the wealthy class in Argentina is the biggest one in the history of the Fund, and its sole objective is to protect foreign investors who already own many of the country’s productive sectors.
At the start of June, the president was shown signs of support from some world leaders as he committed with the fund.
During an official meeting, Macri seemed to celebrate the new historical level of indebtedness as he was photographed along with the director of the IMF, Christine Lagarde, and the leaders of the G-7 in Canada. The Argentine president was invited to the summit as a current member of the G-20 group.
The agreement provoked fears among the blanched Argentine citizens who are very aware of the crisis of 2001. Therefore, and just over a year of elections that should involve the revalidation of Macri, the Argentinian government and the Fund lied to the people of Argentina saying that the coming cuts will not affect the social subsidies established by the Kirchnerism.
“The program is innovative because it especially protects the most vulnerable sectors,” said the Casa Rosada statement. “The monitoring of social indicators is explicitly included and, for the first time in history, in a program with the IMF, a safeguard exists that allows increasing social spending if the Argentine Government considers it necessary,” the note continued.
That statement supposedly means that the country will be able to divert up to 0.2% of the agreed fiscal objectives, which is equivalent to $1,2 billion, to invest in “especially allocated programs” as well as in labor measures of gender equality.
“The program was presented by Argentina and reinforces our commitment to eliminate the economic imbalances that have plagued our country for decades,” says the executive’s statement.
“It is a plan conceived and implemented by the Argentine Government that aims to strengthen the economy for the benefit of all Argentines,” reads the note by Christine Lagarde.
Both the Argentine government and Lagarde are full-time liars; snake oil salesmen who do the bid of the bankers, not the Argentine people.
With a low growth expectation for 2018 – between 0.4% and 1.4% -, the bailout will do little to change that. The government’s deficit will continue to balloon out of control, not to decrease as the statement says. It will never fall to 1.3% by 2020. In order to show that, the government will cook the numbers as many bureaucracies do.
Regarding inflation, the pact does not cite an objective but private analysts raise it to 27%, after a devaluation that is already evident in prices. However, the agreement fixes an inflation of 17% for 2019, of 13% for 2020, and of only one digit, 9%, in 2021.
The details of the loan were explained on Thursday by the Finance Minister, Nicolas Dujovne, and the President of the Central Bank, Federico Sturzenegger, whose autonomy is now, more than ever, inexistent.
As part of the agreement, the Central Bank will stop intervening to control the price of the dollar, allowing free float. The US currency appreciated yesterday with respect to the peso.
In order to save social subsidies, the anticipated cuts will come through the reduction of public works, but also by dismissals of public workers and increases in taxes, which will hurt the most vulnerable classes.
Those reductions in public spending and the rise in taxes are what fuelled an attempt by a diversity of groups to carry out a strike last week. In the end, the strike was averted due to the signing of the agreement with the IMF.
The IMF will make the first transfer to Argentina on June 20, for an amount of $15 billion dollars. At the same time, the Government announced that it will receive three more loans from the IDB, the World Bank and CAF in the next twelve months for a total value of $5,6 billion dollars.
Thanks to Macri and the IMF, the Argentinian people, like many others before, will wake up homeless in the land that saw them come into existence.