By Pablo Esteban Dávila
Alberto Fernández warned bondholders yesterday that “they must know that we are not going to postpone any Argentine to pay a debt that we cannot pay” in the framework of a virtual act to inaugurate modular hospitals for Covid-19 patients. He insisted that “we are very aware of what is happening to us, what is our priority and what is our first interest, which is to take care of the health of Argentines”, noting, more abundantly, that “nobody is going to bend us in that” .
His statements were a response to the position of a group of creditors who insist that the government must accept the counterproposal presented to Martín Guzmán on Monday of last week. Although the difference between the parties is not great (the minister proposes a valuation of sovereign bonds of $ 53.5 and, the counterpart, of $ 56.5 per sheet), the president seems not to want to give the arm to twist, at the same time that the possibility of a negotiated exit is removed.
The president’s intransigence is typical of populism, which always requires the presence of an enemy who conspires against the people’s saviors. The bondholders, in the context of the pandemic, are the perfect target: heartless characters who pretend to collect when Argentina’s suffering is palpable.
The problem is that the country was already suffering – economically speaking – without the creditors doing much. Or does it occur to someone that, without the threat of external debt, things here would be better? The macro inconsistencies are so strong, so structural, that the subject that haunts the president is, if you like, minor.
It is true that the debt has grown a lot during the previous administration, but it is no less real that the successive economic ministers of Mauricio Macri took dollars from the market to pay the ones that Cristina borrowed at the time and kicked forward. Nor, either, that successive national governments have had to go into debt because the level of internal public spending is simply impossible to defray with the resources generated by the tax system.
Fernández, instead of admonishing external creditors with useless rhetoric, which no longer moves anyone, should explain to citizens that the debt exists because the national state is incapable of financial restraint. From so much fighting, supposedly, against poverty, governments have made us increasingly miserable and dependent on investment funds that should be periodically tempted with implausible interests, which, for example, neither Bolivia nor Paraguay would even consider.
No one ever forced Argentina into debt. He did it by a sovereign decision, the result of his fetishism of the State, which drives him to spend on the most absurd adventures in search of social justice and economic independence, historical clichés to cover up colossal waste. And now those who lent him are the callous! The President offends, once again, intelligence and common sense.
It also does so when it makes the debt settlement formally presenting the measures to reactivate the economy that, apparently, it keeps under seven keys. Any creditor, however infamous it may be, has the right to ask how the government, be it Argentine or Ukrainian, will do to pay him once the terms of the settlement have been agreed. With an indecipherable logic, Fernández puts the cart in front of the horse: “First sign, and then we will tell you how we are going to do it.” To make matters worse, just stated, no less than before the Financial Times, that he “does not believe in economic plans”. It is not something you see every day.
There is nothing mysterious or gorilla about the reluctance of the creditors; they simply find it difficult to accept the word of an incurable prodigal. In cold numbers, Argentina is far from being the most indebted country in the world. Great powers owe more than their GDP, and yet the market lends them all the money they require at extremely low rates. It also does so in these difficult times, with its economies falling sharply and with general expectations on the ground. Discrimination towards Buenos Aires? Absolutely. They only trust their political and productive systems. An orderly, predictable and integrated country to the world is the best guarantee of low interest rates and abundance of capital, quite the opposite of the one led by Fernández.
However, it is understandable that the president wants to renegotiate the debt. Although he sincerely wanted to pay it, he has no way to do it. But it is one thing to confuse a technical instance, give and take, with a national and popular epic. For a long time, the debt has not influenced our setbacks; in fact, we were in default for more than 10 years without things improving substantially. Furthermore, the tax pressure did nothing but increase, without the greatest fiscal effort being destined, as far as is known, to calm any vulture fund. If the Casa Rosada does not understand this, it runs the risk of confusing its philippines towards the bondholders with a prongy cause that, if exaggerated, will do nothing but deepen the complex problems that the country is going through.