Martín Guzmán: To modify the controls, you have to be able to have more dollars in reserves

Regarding the criticism for the lack of a plan, and that it is also agreed with the IMF, the head of the Palacio de Hacienda said: "It is a semantic discussion. There are always projections in the budget law and we are going to present A law that includes a multi-year budget and has projections. If you think of a plan as rigidly tied to predefined actions for a long time, it makes no sense. Less in an economy with the volatility of Argentina and in a context of pandemic. Do you ask Germany and the US for a PowerPoint? ".

" What there is is a clear definition of what the objectives are aimed at and how to manage the economy to reach those objectives, which are to generate added value , work and calm the economy by generating foreign exchange. There are macro and micro instruments to aim at these objectives. The budget law defines what they are, as well as the fiscal program and how it is financed. It implicitly includes a monetary program. What we have it is an economic strategy. Someone can call it a plan and no problem. In Argentina a powepoint with rigid actions is often called a plan. And that never worked "he added in this regard.

Regarding whether there will be discussions on labor or pension reform with the IMF, Guzmán warned " the IMF will make its proposals. Negotiations did not start. We are going to aim for a program that respects what is healthy for the country. We are not going to accept something that damages Argentina. "He also said that he believes that the negotiations will be extensive:" It will take months. It would make sense in the first months of next year. "

Consulted on the agreement on the legal issue with the private creditors confirmed that" there is a preliminary agreement. It is a clear possibility of having two contractual innovations that would do Argentina good. We seek that it be endorsed by the financial community "and that it believes that it will be" greater than the threshold of the collective clauses ".

" We went to the maximum effort that Argentina could do and in the last section we redefined the date of payment, without changing the dollar amount to be paid. The agreement can be sustained over time. The payment schedule that leaves Argentina since 2024, with the next government, is of a much lower volume than we receive. And … we were negotiating. What did they want me to say! Now I offer forty, but can there be more? " Guzmán detailed.

Regarding the economic plan to reactivate the country, he said: " The central thing is the budget law 2021. As part of that scheme measures are included to reactivate the domestic market. In 2021, the State will have an important role accompanying the private sector. The State has to promote certain sectors so that there is more dynamism in the economy. Public works will play a very important role and, there, particularly housing. There will be policies to boost demand in general, accompanied by credit at sustainable rates. In addition, we will promote measures aimed at having better conditions for increasing the production of what is exported. After the pandemic, there will be idle installed capacity that will allow the country to recover without increasing savings levels. But, to sustain growth, it will be necessary that, when dollar consumption increases, generation will also grow. For that, exports have to grow ".

Guzmán was also consulted about the different types of changes and the gap between them and assured:" The gap is an issue that concerns us. And we are taking a series of measures, such as the restructuring of the debt in a comprehensive manner and the deepening of the market for public debt in pesos, aimed at stabilizing the alternative dollars . Regarding exchange controls, we have said it: we seek to move towards more reasonable capital account regulations, but other than those of the previous government, which were pure liberalization to encourage the entry of speculative capital. To modify the controls it is necessary to be able to have more dollars in the reserves. It takes time ".

Regarding the REM projections that assures that this year inflation will be close to 39%, the Minister of Economy said" we are very respectful of market expectations. REM has consistently missed its forecasts and we have different forecasts. Ours have been getting it right. Inflation is within the ranges we have been forecasting. Reality and the REM have been far apart. "

Regarding the prospects for the Argentine economy next year, the head of the Palacio de Hacienda said: " In 2021 we are going to have a significant primary deficit, but less than 2020. It will be a context in which work will continue to stabilize prices, but reducing inflation requires persistent work on a path that takes time. There will be some public debt in local currency in a market that has been reactivated; the needs of the transition will be respected while on the horizon we seek that there is no dependence on the BCRA by the Treasury ".

" Our number one objective is to create jobs. The State is going to have a very important role in pushing the economy. If not, there would be a lack of dynamism that would impede the generation of work and the recovery of activity in a context in which a very deep global and domestic crisis is going to be emerging. Someone has to give certainty that what is produced will be demanded. For this reason, the State has a very important role, "assured Guzmán.

Regarding the local financial system, he said:" We will seek to leave Argentina with a reorganized financial system. Today we have a system that made structural what were economic emergency measures. The banks' private sector deposits are channeled to lend to the Central Bank, which offers Leliqs and then we have to issue to pay them. All instead of the savings being channeled towards credit for productive investment and eventually for public policies, but above all to the private sector. The financial system works in an anomalous way that we seek to correct ".

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