Rene Alaniz

Eco 357L

"Argentina, IMF Close to Debt Pact, Grinspun says"

By George Hatch, Wall Street Journal 07/20/84

Summary: This article is about how Argentina plans to deal with its growing financial crisis. The Argentine economy is in a bind with the IMF and its creditors over the 45 billion dollars it owes. The banking institutions have refused to renegotiate the terms of the loans until an agreement is reached with the IMF. In this article the Argentine Economy minister Bernardo Grinspun has come to an agreement with the IMF on an economic austerity program. This plan is claimed as "austerity without a recession", in where the economy will grow 5% and wages will be adjusted to inflation by 6% to 8%. Grinspun’s speech did not announce any new plans for austerity, but said that the government would try to make Argentina’s tax system more progressive. He also went on to say that an export promotion on agriculture products would be key factor in making Argentina’s currency to pay it foreign creditors. Also industrial promotion would be utilized which would not raise the already staggering 580% inflation.