Massa asks Buenos Aires University to audit debt exchange

The Economy Minister will exclude the social security system from the operation if the analysis determines that the exchange is detrimental

Economy Minister Sergio Massa said the debt exchange announced this Wednesday would earn some US$2 billion for the National Social Security Administration (ANSES), responding to the opposition’s assertions that it would harm the institution’s accounts.

“I decided that the UBA (Buenos Aires University) will deliver an expert opinion on whether [the exchange] is beneficial to the ANSES,” Massa said today in an interview with Radio Mitre. “If they conclude it is not, the ANSES will not participate in the exchange.”

The compulsory debt exchange, which was decreed this Thursday, requires public institutions including the ANSES to switch public sector dollar bonds under NY law into peso bonds. Massa said the government expects to withdraw some US$4 billion of hard dollar bonds.

The measure, together with eliminating restrictions on Argentine brokers holding some Argentine bonds, is part of a package intended to control the financial dollar rates.

“Financial dollars are also part of the fight against inflation,” Massa said. The measure aims for the government to have more fire power to intervene in the financial dollar market, that is, in the blue-chip swap rate, which saw a surge last week.

“The exchange is a reordering of the government’s sovereign debt. We had 113 public institutions that, in a disorderly fashion, bought and sold public securities,” Massa said. “That is a problem”.

“The retirees’ money”

Opposition members on both left and right heavily criticized the exchange, especially the part that affects the Sustainability Guarantee Fund (FGS), a sovereign investment fund that partly finances ANSES. ANSES is the administrator of social benefits in Argentina, including retirement pensions.

Elisa Carrió, leader of the Civic Coalition, a party in the Juntos por el Cambio opposition alliance, called Massa’s measures “treason”.

“It is the best business for banks, and all for two or three days of calm,” she wrote, referring to the fact that the private sector will hold more US dollar instruments at the end of the exchange.

National deputy of the Left and Workers Front (FIT) Nicolás del Caño tweeted that for retirees, the exchange is “robbery”. “The government is handing ANSES bonds to banks. In exchange, they receive pesos,” he tweeted. “They are using the money of people that worked their entire lives as a raffle prize for the speculators’ party.”

National deputy Luciano Laspina, a top economist with rightwing party PRO, a large member of Juntos por el Cambio coalition,  said that the government is “looting” both the FGS and the Central Bank. Two other Juntos por el Cambio representatives, Jesús Rodríguez and Paula Oliveto, accused the government of misusing the retirees’ money.

Moreover, the Apolo Foundation, linked to Juntos por el Cambio deputy Ricardo López Murphy, filed a legal complaint against Massa and president Alberto Fernández for violating the ANSES’ “financial autonomy.”

Meanwhile, a report by business consulting firm Ecolatina called the decisions “drastic measures in complex times” that do not solve the government’s Achilles’ heel – US dollar scarcity, deepened by a historic drought, which Massa called “the worst since 1922.”


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