The new challenges to be overcome Argentina’s new government, led by Mauricio Macri, will give a new impetus in the international markets. A few days after assuming the presidency of the South American country, the economic debate has been one of the most salient issues in the presidential agenda.
The economic measures already began to establish in the country of Argentina starting with the removal of restrictions on the dollar exchange which would be an improvement in the international economic relations. Although several adjustments are needed to restore the economic stability that was broken in the last 12 (twelve) years with the Kirchner governments, the changes appear favorable for the financial system of the country.
One of the main actions to be taken by the new Argentine authorities is to restore the relationship with its major creditors (the holdouts) to restructure the economic system of the nation. Although it is not an immediate solution, with the latest decisions of the president Macri, the agreements aims to be favorable to rebuild the economic model.
Some experts say that this type of business requires a 100% payment, including the interest recovers, which would be a real surprise if these holdouts funds are willing to accept less than the estimated. The conflict lies in the inflexibility of both parties to cede part of their conditions for reaching an agreement, which would be difficult to reach an agreement position.
Allowing aside the differences between the creditors and the Argentine government is the good availability that is showing the current government to reconcile and remove any difficulties that may prevent the entry of the country of Argentina into the international economic market. Although it is currently impossible for the new Argentine government to pay 100% of the debt, this new political model could present new proposals that will enable creditors to loosen its conditions imposed for the payment of debt.
The election of the new Argentine president has been well received by the business community which augurs good relations between Wall Street and the country of Argentina, provided that the right decisions are taken and both parties have the availability to reach an agreement that allows to demolish the more than 10 (ten) years of economic model implemented by the former government of Nestor Kirchner and Cristina Fernandez.
The changes that this new government implemented in the country’s economic system should be very significant; especially in “regain its credibility” for the new investors and the creditors to feel much confident betting on a new financial model that focuses on improving its position in the international economic market.
Another important factor that will allow the country of Argentina to recover of its credibility in the capital markets is the impartiality of the judges that can protect the rights of the private property, after the controversy in the year of 2012 about the case of expropriation of the interests of the Spanish Rapsol by the Argentine government. What is clear is that the economic sector of the country is a little hard for the next year to improve the relations with the international investors.
Macri really needs to make an effort, not only to restore the confidence on the financial system of the country but must to negotiate the implementation of new measures in the little space that left him the holdouts to carry out his strategy on the economic policy and thus that his actions do persist favorably with Wall Street.
NEW GOVERNMENT, NEW CHALLENGES
The new measures taken by the newly appointed president of the country of Argentina, Mauricio Macri, has been much more rapid and robust than many expected. Although his economic proposals foresee an improvement to the country’s development in the international markets, there are many challenges that this government will have to overcome to fully gain the trust of the investors and boost the economic policies status proposed by the cabinet.
One of the economic aspects that he should improve as the mandate goes is the inflation. This is an issue that affects millions of people in Argentina who has maintained a sustained price since the year of 2007. Moreover, the increase since the year of 2009 has been a deficit in the public spending, attributed to the international economic crisis which has brought an increase in the tax burden above 30%. Some changes have been seen in the recent days with the rise of the dollar exchange Bough, thereby releasing the economic withholding of the industries.
While the challenges to improve the presence of the country of Argentina in the international market are difficult, the new government of Mauricio Macri inspires so much confidence in the proposals to enhance for the best the economic crisis that has engulfed the country in recent years.