Elections, dollar and IMF: Alberto Fernández met with US officials

The United States Government has already begun the dialogue with Alberto Fernández. The main objective is to preserve the alliance with Argentina considering the high chances that Alberto Fernández reaches the presidence in December, something that will cool relations with Washington.

The discreet meetings with the team of the presidential candidate took place in the weeks leading up to the primary elections, in which Fernández surprised the administration of Donald Trump by defeating Macri by 15 points, one of the main US allies in the region.

In these meetings that were confirmed to iProfesional by sources from both sides, the delegation headed by Ambassador Eduardo Prado was interested in the business of US companies in Argentina, the payment of debt to bondholders and the agreement with the IMF. While in terms of cooperation, security, counterterrorism, the combat against drugs and organized crime, proliferation of massive weapons, human rights and the global situation and in the region, particularly Venezuela, were discussed.

"Yes, we met (with Fernández's team) and we hope to continue doing so," the press attaché of the US embassy, ​​David Arizmendi, told iProfesional.

On behalf of the former cabinet chief, members of the group that advises him on foreign relations participated. Those of greater arrival are the former ambassador to the United States. Jorge Arguello, former Foreign Minister Jorge Taiana and former ambassador to the Vatican, Eduardo Valdés.

"The United States hopes to continue its strong alliance with the Argentine people and their elected leader, whatever candidate the people choose as their next president," the US official added to the consultation on the relations they will have with an eventual government headed by Alberto Fernández and Cristina Kirchner.

The presidential candidate sent new signals to Trump on Thursday during an event organized by Clarín in Malba that Macri later attended. There he said that the relationship with the United States has to be "courteous, kind and respectful" and ruled out a possible bilateral conflict. Thus, he tried to reinforce an image of moderation in the face of doubts that arise in the north about the course of Argentina. Among other reasons for the possible application of capital controls, debt restructuring and tension with the IMF.

The United States is the main external investor in Argentina since it surpassed Spain in 2012, with a stock of US $ 17,000 million in Direct Foreign Investment. And the companies of that country have a lot of interest in the field, oil and energy. Therefore, the economic agenda was one of the main topics discussed in the last meetings. "They are very interested in the progress of their companies and the possibility of doing business," explained a source from Alberto's team aware of the efforts.

The attention returned to Argentina with the jump of the dollar and the capital outflow after the primary elections of August 11. The tax benefits approved by Macri, at a cost of $ 60,000 million, and the arrival at the Ministry of Finance of Hernán Lacunza, replacing Nicolás Dujovne, increased fear on Wall Street about the continuity of the program with the Fund and the growing risk of default. 

But the context of uncertainty did not discourage the White House. "We are the number one investor in Argentina about 300 companies are operating in the country and we are not going anywhere," said the embassy spokesman.

Strained relationships

Fernández's team will receive on Monday the IMF mission that landed on Saturday in the country. As iProfesional knew, Alberto's economic swords approach will be the same as at the meeting last June 27. There will be criticism for allowing Macri to use the loan to curb the exchange crisis in 2018, something that is prohibited by the multilateral organization's regulations; It will be unmarked from the current program and will suggest that there is effectively a default.

At this time, the main concern of the candidate is the level of central bank reserves that Macri will leave after December 10. Since the primaries, the Government burned more than $ 8,000 million to contain the dollar and cancel financial commitments. In San Telmo´s bunker, they estimate that the next government will have to face maturities of more than US $ 150,000 million, without access to the voluntary credit market.

All this with 95% of IMF funds already disbursed and a quasi-fiscal debt for the issuance of Leliq of US $ 26,000 million, with rates of up to 74%.These conditions generate expectations in Washington of greater moderation by Fernandez.

In the meetings held with US officials, the advisors to the former cabinet chief were open to maintaining bilateral relations, expressed the importance that country represents for Argentina and promised to sustain the agreement with the Fund.Trump is key in any negotiation with that financial organization, which agreed to a loan for $ 57,000 million. So be it to change programs.

"We are going to support Argentina's commitment to the IMF, its aspirations to integrate the OECD and the difficult but important steps that are being taken to face economic challenges," they said from the US embassy.

The rapprochement between Macri and Fernández in recent weeks, the latter's support of the dollar at $ 60 and the sending of economists from his team to La Rosada helped to keep the currency at around $ 57 relatively stable. The President asked his rival even to go to Wall Street, but Alberto refused. In their environment they seek to minimize collaborative gestures forced by the crisis.

Fernandez added another wink on Thursday when he said for the first time that the debt renegotiation will be without capital withdrawal for the creditors.

Contacts with the United States are not new. Sergio Massa and Axel Kicillof traveled separately to Washington this year and presented their programs to investors and officials at the Wilson Center. In May, Kicillof held a secret meeting with businessmen from the Chamber of Commerce of that country, as revealed by iProfesional. Then, in June, he was followed by a delegation of mayors and Buenos Aires leaders of the PJ who met in New York with bankers, investors and Trump officials.

After primary elections, Massa was among the first to talk with at least 20 investment funds. In videoconferences, the Buenos Aires´ political leader sought to reassure them.

Surprised by the results that practically ensured Fernández's triumph, investors were restless to know the steps that Macri will follow to ensure governance until December and the economic plan of the incoming government.

New strategy

One of the White House's concerns is the priorities of the next government about its geopolitical strategy. Fernández's commitment to a renewed multilateralism, equidistant from the United States and China, together with greater regional integration is seen as a setback.

In the middle of the commercial war between the two powers, Fernández's advisors question Macri's "strategic error" of having focused his foreign policy in the United States, which facilitated the agreement with the IMF. They believe that these ties generated greater dependence and political commitments.

In that sense, they recognize that the United States continues to be the world´s biggest economic and military power, even at a time of transition in which China disputes its primacy. Therefore, the idea in Mexico Street is to promote greater autonomy.

In commercial matters, the diplomatic team of the Frente de Todos identifies that the greatest opportunities to trade are in the region itself and in the promotion of South-South agreements, including Africa and Asia. But what worries Washington the most is the policy on Venezuela.

While Macri recognized the self-proclaimed president Juan Guaidó and joined the Lima Group, Alberto bets on a negotiated solution beetween Maduro´s government and the opposition.This is a position similar to that of Mexico and Uruguay, opposed to US, China or Russia intervention in the region.

While Fernández acknowledges that the Chavista regime ended up in an authoritarian government, he also believes that, unlike a dictatorship, he was elected at the polls. In the "Front For All" there are other positions that could led to even more tensions with Trump. This is the case of the Kirchnerism nucleated at the Instituto Patria, where they support the summit against the FTAA led by Hugo Chávez in Mar del Plata in 2005.

Today, the Cristina Fernández´s movement observe "destabilization" attempts against the "popular" governments of Venezuela and Nicaragua. The former secretary of the presidency and former intelligence agency chief, Oscar Parrilli, called to support these processes last March during a meeting organized at the institute to analyze "imperialist interference in Latin America from the Condor Plan to the present."