Lula criticises Alberto Fernández for sticking to IMF debt deal

Former Brazil president and candidate in this Sunday’s election says Argentina’s leader is “in a bind” and has disappointed voters by attempting to resolve the nation’s US$44.5-billion debt deal.

Brazilian presidential frontrunner Luiz Inácio Lula da Silva has questioned Argentina’s US$44.5-billion deal with the International Monetary Fund, suggesting that President Alberto Fernández should have broken the deal in order not to disappoint supporters.

Asked for his opinion on Argentina’s political outlook at a private dinner with leading businessman this week, Lula admitted that Fernández, his close ally, is “in a bind” and said he “does not know what will happen to the country” in the wake of an ongoing social and economic crisis. 

According to a report by Brazilian media outlet O’Globo, the favourite to win next Sunday’s presidential election in Brazil said Argentina’s president had disappointed his voters by attempting to restructure the country’s multi-billion-dollar debt, first contracted by former president Mauricio Macri in 2018, upon taking office.

During a dinner promoted by the Esfera Brasil think-tank, Lula asked: „What is the problem of our friend Alberto Fernández in Argentina? Why did he win the elections? Because the IMF encouraged Macri to borrow US$40 billion.“

„Alberto Fernandez won the elections criticising the loan [agreed by Macri], criticising the IMF,” Lula continued. “Now, when he wins, what does he do? He starts losing points by wanting to solve the IMF problem.”

The Workers’ Party (PT) leader went on to suggest that, in his opinion, President Fernández should have broken the terms of an updated agreement between Argentina and the Fund sealed earlier this year. 

Lula’s position echoes that of Argentina’s Vice-President Cristina Fernández de Kirchner, who this year described the IMF’s conditions as „unacceptable.“ The president, however, opted to stick with the deal, despite strong resistance within the ruling coalition.

„In that crisis, with a dismal pandemic, you didn’t have to have paid the IMF or made a commitment to the IMF,“ said the Brazilian leader.

„Fernández is at a standstill. Inflation is at 70 percent and I don’t know what will happen in Argentina. Hunger is very high. It was a powerful country, once the fifth-largest economy in the world. What it lacks is a political choice about who they want to govern for. It’s simple, you just have to choose,“ he concluded.

Lula’s strident criticism is in stark contrast to his position on the IMF deal back in January 2022, when he congratulated Fernández for signing a restructuring deal that “preserves sovereignty” and safeguards “development and social justice.”

„I am very happy that the Argentine government, with the leadership of my friend Alberto Fernández, has managed to negotiate an agreement regarding the country’s debt,“ he said in a post on social networks.

The former Brazilian president stressed that the deal „preserves sovereignty and the possibility of safeguarding development and social justice for the Argentine people.“