Argentine President Javier Milei announced he would file an emergency decree — a tool usually reserved for very specific occasions — mandating that Congress support his administration in a potential deal with the International Monetary Fund (IMF). 

“The Office of the President announces that, as President Javier Milei committed to at the opening of the ordinary sessions, a Decree of Necessity and Urgency will be issued and sent to the National Congress to obtain its support in the agreement with the International Monetary Fund,” began the communiqué posted to X on Thursday evening. 

Last week, Milei called for lawmakers’ support for the ongoing negotiations between the government and the IMF in his opening speech for the start of the legislative year — a 2021 law requires Congress to approve such loans.

The sudden decision was a surprising turn of events since Milei had said he would send a bill for Congress to debate. Conversely, emergency decrees are law the moment the government issues them. Meant for exceptional circumstances such as war and the COVID-19 pandemic, they can be only repealed if both houses vote against them.

The government communiqué echoed Milei’s Congress speech by saying that the agreement would imply a “reduction of the total public debt,” as it would be used to pay Argentina’s National Treasury’s debt with the Central Bank. That means, however, that the Argentine state would be converting the debt it has with itself into new debt with an international financial agency.

“This agreement will strengthen the Central Bank’s balance sheet, an essential milestone to consolidate monetary, financial, and macroeconomic stability and to continue with the disinflation process and the elimination of exchange restrictions,” the President’s Office said in the X post.

Financial analyst Christian Buteler criticized the announcement, saying the executive order will not specify the new program’s conditions. He also challenged the government’s notion that a new deal would not imply incurring more debt. “If there are fresh funds, the foreign debt increases, even if the domestic debt is paid,” he said in an X post.

The shock announcement came hours after IMF Spokeswoman Julie Kozack said that “good progress” was being made in the ongoing talks for a new deal, hinting that negotiations are still underway.

She also distanced the lender from Milei’s call for congressional approval in last week’s speech, something Argentine media outlets highlighted.

“With respect to some of the questions regarding Congressional approval, we do take note of President Milei’s commitment to seek congressional support for a new IMF-supported program. As we have often said in the past, strong ownership and broad support are key to the program’s success,” she said. “Here, I want to emphasize, though, that securing congressional support is a decision of the authorities as legislated in Argentine domestic law.”

The full emergency decree is expected to be published in the Official Gazette on Friday morning.

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