German Chancellor Angela Merkel, the presidential interlocutor last Wednesday, is always going to remind a lot of people of a lot of things because it seems to have been around forever. For so long that some think it is even longer than it is, such as Senate Majority Leader José Mayans, who last February put Peronist Governor of Formosa Gildo Insfrán on par with Merkel on the grounds that “both are in their fifth term”. On both counts – Merkel is nearing the end of her fourth and final term while Insfrán is almost halfway through her seventh with seemingly no end in sight. Quantitatively, Insfrán is therefore seriously underestimated – qualitatively, that could be another story. The comparisons are truly abhorrent.
In fact, Merkel equals the late Helmut Kohl’s record of 16 as Chancellor. Another detail perhaps underscores its uniqueness better – the turn of the millennium cuts its party perfectly from the Christian Democratic Union because throughout the last century, from its founding in mid-1945, it has always been led by various Catholic men (with the brief exception of Ludwig Erhard), while all this century it has been ruled by this one Protestant woman.
Regardless, my main personal memory of Merkel in an Argentinian context dates back to the very first day of Cristina Fernández de Kirchner’s eight-year presidency in 2007, when the latter’s inaugural address proclaimed that Germany was her. model in the world and its model for governance. Her “Cristina, Cobos y vosThat year’s campaign (complemented by a rainbow tour of Germany a month before the poll, funded by Siemens and Volkswagen) had been anchored on her future presidency completing institutional settings, after her husband Néstor had nobly did the dirty work economics (which had in fact been largely done previously by the economics ministers of Eduardo Duhalde, Roberto Lavagna and, more importantly, Jorge Remes Lenicov). With a marriage name of Kirchner and a mother surnamed Wilhelm, all that Teutonic identification seemed to match.
There is little doubt that this identification was inspired by Merkel as much as by Germany as such. Still relatively new to the game with less than 30 months in office, Merkel extended virtual state visit status to CFK in September even though she was then only a presidential candidate until 2011 (when Dilma Rousseff reached the Brazilian presidency) Merkel was the only other female G20 leader in the world, creating potential gender ties at summits – a bigger factor for CFK than for Merkel, it seems.
Anyway, all of this past is tied to the present for a variety of reasons, including President Alberto Fernández as the common denominator – Merkel’s Zoom interlocutor last Wednesday, the then chief of staff was also the main architect of this 2007 campaign, especially its institutional overtones aimed at attracting radical allies with considerable success.
But the most important overlap is the common goal of the German connection over the two decades – the attempt to roll over Paris Club debt while bypassing the International Monetary Fund (IMF). In the first case, this is slightly prior to the presidency of Cristina Kirchner. In the very first days of 2006, Néstor Kirchner severed all ties with the IMF by paying all the US $ 9.8 billion owed on the reserves of the Central Bank (the global boom in commodity prices then prevailing him). left a margin for this shot). A triumphant assertion of economic sovereignty that summer, but the new freedom became anything but free – the Frente para la Victoria government quickly found itself at a standstill of having to negotiate the outstanding Paris Club debt without underlying agreement with the IMF, breaking the rules.
Argentina is an old story for the Paris Club – indeed the oldest story of all since its very first deal in 1956 was with the military regime that had just overthrown Peronism. The name of the Paris Club might make the foreigner think that Emmauel Macron’s finance minister, Bruno Le Maire, rules among the 22 member countries, but in fact, Germany is by far the largest creditor of Argentina here, with 37% of the quota of $ 2.4 billion. due next Monday, followed by Japan (22 percent) – no other country’s percentage goes into double digits. The situation was much the same in 2006-2007, which made servicing the Paris Club debt behind the back of the IMF a central theme of Cristina’s 2007 campaign visit to Germany. But nothing to do – Berlin was no more inclined to let go of Argentina than it was a few years later with its European Union partners known as PIGS (Portugal, Italy, Greece and Spain).
Carried by the bicentennial jamboree that year, Cristina tried again on her next visit to Germany in 2010 (just three weeks before her husband died) but without joy. It had to be the lucky third time – or maybe unlucky. In 2014, then Minister of the Economy (and now Governor of the Province of Buenos Aires) Axel Kicillof was sent to negotiate with strict instructions to achieve the two goals of settling with the Paris Club and bypassing the IMF , whatever the price. As he did in effect, bypassing the IMF, the price of punitive interest rates was almost as high as the original debt of $ 4.95 billion, whereas standard interest payments would have been of approximately $ 1.1 billion.
The final chapter in this saga was the 40-minute exchange last Wednesday between President Fernández and Chancellor Merkel. We don’t know exactly what was said – according to Argentinian sources, Merkel has pledged to continue to support Argentina in its quest for a lasting deal with the IMF and according to the Berlin Foreign Ministry, the The agenda revolved around the coronavirus pandemic and the EU-Mercosur deal. What we do know is that there is only one weekend left until this Paris Club quota of $ 2.4 billion which expires on Monday (although there is a two-month grace period, which is not enough to postpone an agreement after mid-term).
The outcome remains very uncertain – a default is not really suitable for either party but if the government continues to increase its budget deficit and its taxation at the same time amid Kirchnerite pressure to ban the use of even money coming from the IMF to pay back the Fund or the Paris Club, then you could end up with a default.