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Argentina to end national lockdown and reopen local economy

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Argentina to end national lockdown and reopen local economy

Lockdown in Buenos Aires
Photo: Sarah Pabst/Bloomberg

Argentina is set to end its nationwide lockdown today by allowing cities and provinces to begin reopening local businesses and residents to leave their homes.

Small businesses have been extremely frustrated by the strict quarantine. During the lockdown, 54% of small and medium-sized businesses have been forced to close. Despite an ongoing recession, Argentina acted swiftly to implement a strict stay-at-home order to counteract COVID-19’s spread. Argentina’s GDP is predicted to fall 5-10% this year.

Last week, following an announcement that Argentina will pause foreign debt payments, Argentina’s Economy Minister Martin Guzman unveiled a plan to restructure national debt, including $40 billion in debt relief. Still, a resolution has yet to be reached.

The end of the lockdown will allow small businesses to slowly begin to recover, but millions of jobs continue to be at risk. Creditors are unlikely to accept Guzman’s plan, since Argentina has been unclear about what its fiscal program entails and has yet to address its upcoming debt payments to the IMF. In addition, the plan has been called a “lowball offer” that would leave private creditors paying for debt relief.

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US Senator Chuck Schumer (D-NY) expressed hope that Democrats and Republicans would reach an agreement on amendments to advance the bill. Photo: Kenny Holston/The New York Times

In order to reach an agreement, Argentina needs to quickly provide an offer that makes sense for bondholders to prevent more businesses from collapsing.

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