Argentina's Lower House Approves Debt Renegotiation Bill

Reuters. January 30, 2020

BUENOS AIRES — Argentina's lower house of Congress approved a bill on Wednesday that would enable the government of President Alberto Fernandez to handle a massive debt restructuring of bonds issued in foreign currency that it needs to negotiate with creditors.

With support from the opposition, the bill was approved with 224 votes in favour and two against. The bill moves to the Senate, where it is expected to pass next week.

The Fernandez government, inaugurated on Dec. 10, is looking to renegotiate about $100 billion in sovereign debt amid a deep recession, inflation of more than 50% and a weakened peso currency. Fernandez set a deadline of March 31 to deal with Argentina's public debt.

"It is necessary to give tools in fiscal matters, in foreign exchange matters, and this bill gives tools to negotiate," said a former economy minister Jorge Sarghani who is a lawmaker for the ruling party.

Economy Minister Martin Guzman met with International Monetary Fund officials in New York on Tuesday for talks on how to proceed with its $57 billion (43.4 billion pounds) credit facility agreed under the previous administration of Mauricio Macri in 2018, the largest in the Fund's history.

Guzman and Luis Cubeddu, head of the IMF mission in Argentina, both said the meeting was positive and productive.