The lobbyist of foreign bondholders to achieve an improvement in the conditions of the offer and displace Martín Guzmán as the only negotiator of the external debt, tries to seduce Alberto Fernández through different formats and modalities: chat, email, cell phone, videoconference, coffee alone, institutional lunch, dinner with friends, recorded message and papers in English with glittering four-color graphics.
“I am not going to change a comma, and Martín (Guzmán) is the only one authorized to speak with the funds”, the President repeats, over and over, when he comes across a new lobbying operation in favor of bondholders under foreign law.
The President has certain political-financial arguments to reject the representatives of the funds that enter his privacy in Olivos personally or digitally. “Our offer is less than the withdrawal suggestion proposed by the International Monetary Fund (IMF), and we did it to demonstrate that we want to close and avoid default ”, argues Alberto Fernández with the numbers already learned by heart.
The reply via chat, mail or in the solitude of the fifth presidential is immediate. “If you loosen a little, if you pay more interest, they close it in three days …”, they comment in a infinite loop.
Alberto Fernández appeals to his years as a university professor and fights back with a single line of argument. “The Fund said that solvency was reached with a reduction that went from $ 55 billion to $ 85 billion. And we made an offer that is just above 50 billion. There is nothing to negotiate ”, argues the head of state looking at his interlocutor or writing with two fingers on his WhatsApp account.
Investment funds consider that Alberto Fernández has a closed speech, that the Economy Minister does not understand how to negotiate with external creditors, that the IMF’s managing director, Kristalina Georgieva, presents the wrong view regarding the possible resolution of the Argentine external debt, that Columbia University in New York – where Guzmán teaches – is a bad influence and that Nobel laureate Joseph Stiglitz is already demodé.
The President rejects each of those arguments presented by the bondholders and he is convinced of the ideological line applied by Georgieva, Stiglitz, Guzmán and Columbia University regarding the management of external debt and its private holders in the midst of the COVID-19 crisis.
Jeffrey Sachs was educated at Harvard, taught at that prestigious university, was a special advisor to the United Nations, stands out for his contributions in global macroeconomics, He is a member of the Columbia payroll and is a key figure in the dialectical elaboration of the arguments about foreign debt promoted by Georgieva and endorsed by Alberto Fernández with his strategy against the funds that operate on Wall Street.
On Monday, April 20, Alberto Fernández and Sachs discussed the offer to bondholders that day was published in the New York SEC. The phone call lasted almost an hour, and the President was left with three conclusions:
1. The Argentine proposal to investment funds is more seductive than the interest currently paid by the sovereign bonds of the United States Treasury.
2. The offer to bondholders was made before the pandemic and its impact on the national economy. That is to say: if it had taken into account that global fact, its conditions would be more aggressive with respect to the grace periods, and it removes interest and capital.
3. Sachs explained that the COVID-19 crisis can “leave forty countries in default”, and that it is a variable that should not be ruled out in the face of the intransigence of the bondholders.
Alberto Fernández’s position may imply a breaking point with New York’s capital markets and cool the relationship with the White House and the United States Department of the Treasury. Larry Fink, CEO of BlackRock, has already begun to move his influences in Washington and in the International Monetary Fund to get the president to open his hand and offer better conditions for negotiating external debt.
BlackRock, Fidelity, Ashmore, Templeton and Pimco, among other great players of weight, have already rejected the offer designed by Guzmán and do not plan – for now – to present a formal and alternative proposal. Yes, these funds have opened several ways to reach Olivos -digital and personal-, and in all cases their arguments were ignored – over and over again – by Alberto Fernández and his Minister of Economy.
In this context, with both parties in intransigent positions, it is not ruled out that there is default. It would be a paradox that is difficult to explain: Alberto Fernández and the main investment funds swear that they do not want to go to court in New York. But a few days after the deadline set by Guzmán -May 8-, everything seems to indicate the opposite.