Brad Budsberg

 

“Argentina IMF Plan Jeopardized,”

Wall Street Journal, 2/5/85

 

Main Point:

The International Debt Crisis is causing many debtor countries to take drastic actions to receive vital loans and rescheduling to save from defaulting on previous loans.  The situation affects both government and citizens as both work toward compromises.

 

Summary:

Argentine is very dependent upon the IMF and the assistance it can provide given certain actions are imposed and maintained.  Austerity upon the people is the cost for new loans and rescheduling are what are allowing the country from not defaulting on its 48 billion foreign debts. 

 

Tough Times:

As Argentine’s inflation rate reaches 24%, it jeopardizes the countries compliance with the IMF austerity program.  The break in the program was thought to be an attempt to improve chances of winning business and union support for a comprehensive economic plan.  Others comment on the alarm of a recession that has been forming ever since austerity was started.  To complicate the issue, the Argentine government needs an agreement with both business and union leaders to get the labor peace and price restraint necessary to meet IMF’s first-quarter targets.

 

The Predicament:

The situation is running into a large stumbling block as the Argentine government refuses to engulf the heavy political cost and explain to the citizens that the situation will be a rough time and that sacrifices Will be made.