Argentina Wracked by Total Crisis, as IMF Laments ‘Vacuum of Power’

Aug. 27, 2019 (EIRNS)—In the past 36 hours, the Argentine financial crisis has imploded: The peso devaluation accelerated today, despite seven Central Bank dollar auctions to stabilize the exchange markets; the stock market crashed by 4% today; reserves are hemorrhaging. Over the past month, they have dropped by $10.8 billion, $8.5 billion of which just since the Aug. 11 primary elections in which the opposition Fernández-Fernández ticket defeated President Mauricio Macri by 15%. Should reserves continue to decline at this rate, there will be nothing left in five months. The country risk rate is now close to 2,000—a record high.

The situation is so fragile that the high-level International Monetary Fund mission that arrived over Aug. 24-25 weekend tried desperately to secure a commitment from primary victor Alberto Fernández, that he will continue with the IMF’s vicious standby austerity agreement should he win October’s election outright. Otherwise, the Fund said it will be hard pressed to justify releasing the next $5.6 billion tranche of the standby program, which is urgently needed to bolster reserves—standard IMF blackmail.

Both dailies Clarín and Página 12 reported that the head of the IMF’s Western Hemisphere Division, Alejandro Werner, who wouldn’t normally make a country visit, told Alberto Fernández and his economic advisers yesterday that he was worried about the “vacuum of power” in the country—it’s assumed Macri will lose in October—hinting that some form of “co-government” arrangement would work best. After it was leaked to the media that Werner’s team even suggested moving up the elections, the Fund had to immediately issue a press release “categorically denying” it had said any such thing.

Fernández’s response to the Fund proposal left no room for doubt: “No.” Macri and the IMF are responsible for the economic and social debacle in the country, he said. Macri is the President, he should govern. “We are not in power.” Argentina will meet its commitments, he further stated, but on terms he, and not the IMF, will determine.

Any continuation of the IMF program is a political and economic impossibility in any case. The degree of societal breakdown is horrific. Eyewitnesses report that in the beautiful capital of Buenos Aires, it is common to see entire homeless families living on the streets in the downtown area, some inhabiting large, unsafe containers that can be hit by cars or garbage trucks. These scenes would have been unthinkable just a few years ago. One longtime EIR subscriber reports that in his middle-class neighborhood, there is a homeless person living on nearly every corner. People on the streets are angry and agitated at having been deprived of basic necessities, jobs, homes, etc.