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Georgieva calls for “cutting off the head of populism” Georgieva lumps together governments and movements that may have significant differences, from Argentine Peronism to various center-left or center-left experiences in Europe, under the label of populism. In doing so, she seeks to portray any questioning, even if only verbal, of austerity policies as a threat to economic stability . But the fundamental question is something else entirely. Who benefits from the fiscal order demanded by the IMF? What does it mean for a country to have learned to endure hardship? And why should workers accept that their living conditions are the necessary price to pay for the stability demanded by creditors? Austerity and “populism” are not the way out Georgieva presented the streamlining of public finances as an essential condition for growth. According to her argument, countries that have weathered crises and learned to control spending have achieved better economic results. She cited Greece, Portugal, and Ireland, in addition to Argentina and Chile, as examples. Faced with national debt, the response would be to reduce public spending, move forward with structural reforms, and accept transformations that may prove "unpopular." The official even questioned the resistance in Europe to raising the retirement age, arguing that people are living longer and should work longer. She clarified that her statement might not be "popular," as if the demonstrations in France, Italy, and Spain weren't clearly demonstrating the enormous discontent caused by the deterioration in living conditions . In his remarks, he also warned that global public debt is approaching the equivalent of 100% of global GDP. He pointed particularly to the United States, whose debt is around $40 trillion and whose fiscal deficit is approaching 6% of GDP. “I don’t really think growth alone can pull us out of the debt hole. It would also require fiscal discipline,” he stated. The problem with this reasoning is that it presents profoundly political decisions as a technical necessity . It fails to explain why, faced with national debt, the solution should be to cut pensions, wages, education, healthcare, and infrastructure, instead of discussing who concentrates wealth and which sectors benefit from economic policies. The IMF's fiscal discipline has a very specific priority: ensuring that states have the necessary resources to meet their financial obligations , even if that means subordinating other social needs. Adjustment is not a sacrifice shared equally. While workers lose income and rights, creditors collect their payments, and large corporations obtain tax breaks, privatizations, and new business opportunities. The consequences of Milei's adjustment In Argentina, the Milei government made this approach the cornerstone of its program. The fiscal surplus is sustained by cuts to pensions, public sector wages, universities, infrastructure, and various social programs . At the same time, the IMF is demanding deeper labor reforms, progress on infrastructure concessions, and guaranteed benefits under the Large Investment Incentive Regime (RIGI). The very evolution of the economy belies the idea that austerity is a path to growth . The IMF lowered its growth forecast for Argentina in 2026 from 3.5% to 2.1%. Economic activity has stagnated , and industries dependent on the domestic market continue to suffer . Since November 2023, total public debt has increased by nearly $99 billion, according to data from the Ministry of Finance up to September of this year. The government presents fiscal balance as a historic achievement, but this result coexists with an economy that is losing jobs and with a debt that continues to grow. And the IMF itself has been questioning Caputo's figures, which appear to be more creative accounting than genuinely positive numbers. Although Kristalina is now calling for the end of populism, the government of Alberto Fernández and Cristina Kirchner maintained a very good relationship with the international organization , paying the external debt, recognizing even the 100-year bonds sold to vulture funds, and not questioning the power of large economic groups in the slightest. Differences with Milei exist and are significant, but they were not about offering a fundamental solution to the country's structural problems. The discussion also cannot be reduced to choosing between austerity and increased public spending without questioning who controls the economy's resources . If the main economic levers remain in the hands of large corporations and banks, decisions about investment, production, and employment will continue to be subordinated to their profits. A solution based on workers' interests requires breaking with this constraint. Sovereign repudiation of the external debt would allow for a halt to allocating resources to creditor payments. It is also necessary to end the tax privileges of large economic groups, nationalize the banking sector and foreign trade under workers' control , and place strategic sectors of the economy at the service of the needs of the vast majority . https://www.laizquierdadiario.com/Georgieva-pide-cortarle-la-cabeza-al-populismo-quienes-pagan-el-ajuste-que-defiende-el-FMI? Back |
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