Committee for the Abolition of Illegitimate Debt

 In what context did the IMF IMF
International Monetary Fund Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org and China throw Javier Milei a lifeline in April 2025?

In April 2025, the IMF’s executive board approved a new $20 billion loan to support Javier Milei’s government, saving him from a clear economic failure that would have cost him dearly politically in the October 2025 elections [1]. The IMF disbursed $12 billion almost immediately, as the situation was so dire that it required an urgent injection of foreign exchange reserves. At the same time, China renewed its credit swap agreement for the equivalent of $5 billion, which also constituted vital aid for Milei. Meanwhile, the World Bank World Bank
WB The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

(WB) announced that it would lend $12 billion and the Inter-American Development Bank (IDB) $10 billion over a three-year period.

The conservative Spanish daily El Mundo announced the measure with the headline:

“Argentina receives a $20 billion lifeline from the IMF.” It went on to say: “This news comes at a crucial moment for the Argentine economy, which has begun to show worrying signs in recent weeks: inflation Inflation The cumulated rise of prices as a whole (e.g. a rise in the price of petroleum, eventually leading to a rise in salaries, then to the rise of other prices, etc.). Inflation implies a fall in the value of money since, as time goes by, larger sums are required to purchase particular items. This is the reason why corporate-driven policies seek to keep inflation down. has stopped falling, the dollar has started to rise and the country’s risk rating has exceeded 1,000 points. Amid the international financial turmoil and an extremely delicate moment for his government, Javier Milei welcomed the $20 billion ’lifeline’ that the International Monetary Fund (IMF) has thrown to Argentina.”Come on, Luis Caputo, damn it!" the Argentine president wrote on social media on Tuesday evening, quoting his economy minister.” [2]

On 12 April 2025, the daily newspaper Le Monde published the headline “Argentina obtains $42 billion from international financial institutions” (with $20 billion from the IMF, $12 billion from the World Bank, and $10 billion from the IDB, as noted above) and included the following in the body of the article:

“Milei needs this agreement like air.” Le Monde reported that the Managing Director of the IMF, Bulgarian Kristalina Georgieva, had posted a message on X stating that “This is recognition of the impressive progress made in stabilising the Argentine economy” and a “vote of confidence in the government’s determination to continue with reforms” [3].

The conservative Argentine daily Clarín, for its part, reported:

“The IMF will grant Argentina a loan of $20 billion as part of a four-year programme. This includes an initial payment of $15 billion in fresh funds.” [4]

For its part, the Argentine government obviously welcomed the IMF’s support and used it in its communications with the Argentine public and foreign investors. [5]

At the time of writing, on 22 September 2025, according to the IMF website, Argentina owes it 40,260 million SDRs (SDR = IMF unit of account [6]), equivalent to USD 55,253 million. Argentina is the country most exposed to the IMF and, conversely, the IMF is more exposed to Argentina than to any other country. If Argentina were unable to continue making repayments to the IMF in the future, the situation would put the organisation in great difficulty.

Argentina owes more than USD 55 billion to the IMF. Argentina is the country most exposed to the IMF in the world, and, conversely, the IMF is more exposed to Argentina than to any other country

Argentina’s debt to the IMF is approximately 12.6 times Argentina’s IMF quota [7] , or 12,600% of its quota. To compare with the situation of other countries heavily dependent on the IMF, Greece’s debt to the IMF is about 2.8 times its quota, Pakistan’s debt to the IMF is about 3.3 times its quota, Egypt owes about 4.3 times its quota to the IMF, and Ukraine owes about 5.4 times its quota to the IMF. So Argentina’s situation is much more serious, and the IMF is well aware of this.

 What was Javier Milei’s economic record?

The timing chosen by the IMF and other lenders is crucial. Indeed, the hyper-brutal economic programme of the neo-fascist President Milei was (and is) on the verge of failure, even though inflation had fallen. While at the beginning of his term Milei had sharply devalued the Argentine currency against the dollar, he then pursued a policy of revaluation or appreciation of the exchange rate. This policy allowed the Argentine peso to revalue against the dollar in 2025, but it had the effect of consuming a significant portion of dollar reserves, particularly to support the payment of imports and allow the upper middle class and the capitalist class to purchase dollars for tourism abroad. As for the evolution of poverty in Argentina, after a sharp increase during the first half of Milei’s presidency, it declined at the end of 2024. In terms of economic activity, after a sharp decline in 2024 that prolonged the 2023 recession, a recovery occurred in 2025. However, if we compare the level of gross domestic product GDP
Gross Domestic Product Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another. achieved in 2022 with that of 2025, we see growth of barely 1% during this period. Thus, despite Milei’s statements, the growth of 2025, which follows the recession of 2023-2024, must be put into perspective. Some sectors are growing (oil and agribusiness, both export-oriented), and others are in sharp decline (those that require the most labour). 150,000 jobs have been lost in construction and 30,000 in industry, and the downward trend is continuing. The purchasing power of pensions has permanently decreased by 15%. In addition, 52,000 civil service jobs have been cut, and public spending has been reduced by nearly 35%. The IMF management has welcomed the budget surplus that resulted from this adjustment. But foreign exchange reserves were at their lowest level. The country faced enormous financial difficulties in meeting its import payments and repaying its external debt, both to private creditors and to the IMF.
There were 150,000 fewer jobs in construction and 30,000 fewer in industry, and the downward trend continued. Pensioners lost 15% of their purchasing power. Fifty-two thousand civil service jobs were cut, and public spending was reduced by nearly 35%

We must also take into account the significant popular mobilisations that took place in 2024 and 2025, among both employees and pensioners, in universities, within the feminist movement and among the unemployed organised in the various piqueteros movements.

Despite this, Milei managed to maintain public support, but this began to erode in the face of the government’s constant refusal to increase social spending and the corruption scandal linked to the overpricing of medicinesfor disabled people, in which Karina Milei, the president’s sister, is implicated. This scandal follows that of the $LIBRA cryptocurrency “Milei coin”. [8]

The economic failure became apparent to the country’s public opinion a few months later, before the October 2025 elections, during which part of the legislative power will be renewed. Milei risked losing the parliamentary majority he enjoys thanks to the support of the traditional right wing and some Peronist parliamentarians. He also risked a poor election result for his candidates.

Consequently, Donald Trump exerted intense pressure on the IMF to provide Milei with a lifeline.

Donald Trump exerted intense pressure on the IMF to provide Milei with a lifeline

 Trump had already come to the aid of a right-wing president in Argentina in 2018 during his first term, hadn’t he?

Indeed, Trump had already done this in 2018 during his first term to support Mauricio Macri by getting the IMF to lend Argentina $45 billion in an attempt to avoid electoral defeat in 2019.

The 2018 loan was odious because it went against the interests of the population. A large part of the loaned sum was transferred abroad in the form of capital flight. Macri lost the presidential elections in October 2019. A Peronist front led by Alberto Fernandez and Cristina Kirchner won the elections by promising a progressive change in policy. But subsequently, the Peronist government that came to power did not have the courage to confront creditors, particularly the IMF. To repay the odious debt Odious Debt According to the doctrine, for a debt to be odious it must meet two conditions:
1) It must have been contracted against the interests of the Nation, or against the interests of the People, or against the interests of the State.
2) Creditors cannot prove they they were unaware of how the borrowed money would be used.

We must underline that according to the doctrine of odious debt, the nature of the borrowing regime or government does not signify, since what matters is what the debt is used for. If a democratic government gets into debt against the interests of its population, the contracted debt can be called odious if it also meets the second condition. Consequently, contrary to a misleading version of the doctrine, odious debt is not only about dictatorial regimes.

(See Éric Toussaint, The Doctrine of Odious Debt : from Alexander Sack to the CADTM).

The father of the odious debt doctrine, Alexander Nahum Sack, clearly says that odious debts can be contracted by any regular government. Sack considers that a debt that is regularly incurred by a regular government can be branded as odious if the two above-mentioned conditions are met.
He adds, “once these two points are established, the burden of proof that the funds were used for the general or special needs of the State and were not of an odious character, would be upon the creditors.”

Sack defines a regular government as follows: “By a regular government is to be understood the supreme power that effectively exists within the limits of a given territory. Whether that government be monarchical (absolute or limited) or republican; whether it functions by “the grace of God” or “the will of the people”; whether it express “the will of the people” or not, of all the people or only of some; whether it be legally established or not, etc., none of that is relevant to the problem we are concerned with.”

So clearly for Sack, all regular governments, whether despotic or democratic, in one guise or another, can incur odious debts. contracted by Macri in 2018, the Peronist government itself requested a new loan from the IMF in 2022 for 45 billion dollars. The wait-and-see policies, which became increasingly unpopular, that this Peronist government had imposed under the guidance of the IMF (to meet the conditions set by the latter and satisfy the interests of big capital) had caused great disappointment among its electoral base.

 What was Javier Milei’s economic gamble?

Milei won the 2023 presidential elections by presenting himself as a saviour and using the same communication methods as Trump

In the October 2023 elections, Milei won the presidential election by presenting himself as a saviour and using communication methods similar to those of Trump. He immediately received congratulations from the IMF. Argentine and international big business was pleased. But the shock measures he took caused a drop in consumption and an increase in poverty, and did not really revive the economy. The already low foreign exchange reserves were further reduced. Milei hoped that his ultra-unpopular austerity policy and multiple deregulation measures would attract a large influx of foreign capital. This did not happen. As a result, his government was running out of foreign exchange reserves to meet the repayments demanded by the IMF. To get out of this situation, he absolutely had to obtain a new loan from the IMF in order to continue repaying it and to pay the bill for imports.

 What was the discussion within the IMF about providing assistance to Milei?

An important internal debate confronted the IMF’s management. How could it justify a new, enormous loan when the official rule was that the IMF could only lend if the loan it granted made the debt sustainable? However, it was clear that the two previous loans, the $45 billion in 2018 followed by an additional $45 billion in 2022, had not made the debt sustainable. The debt had increased significantly.

Within the IMF’s management, voices were raised to say that the new loan and the new programme linked to it would not yield Yield The income return on an investment. This refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment’s cost, its current market value or its face value. better results than the previous ones. The IMF’s permanent staff were well aware of this. But Trump put maximum pressure on Kristalina Georgieva, the Managing Director, and on the staff.

 What was the position of the BRICS BRICS The term BRICS (an acronym for Brazil, Russia, India, China and South Africa) was first used in 2001 by Jim O’Neill, then an economist at Goldman Sachs. The strong economic growth of these countries, combined with their important geopolitical position (these 5 countries bring together almost half the world’s population on 4 continents and almost a quarter of the world’s GDP) make the BRICS major players in international economic and financial activities. + members within the IMF?

The BRICS member countries notably acquiesced to Trump’s pressure, unanimously voting in April 2025 in favour of the $20 billion loan. Lula’s Brazil took an active role in persuading other Latin American nations to support the loan, although Milei poses a significant threat to democracy in the region and endorses Bolsonaro and the far-right in Brazil, who are vying for victory in the upcoming elections in October 2026.

The BRICS countries bowed to pressure from Trump and all voted in April 2025 for the IMF to lend $20 billion to Milei’s government

China, Russia, India, South Africa, and the other new BRICS members, as well as representatives on the IMF’s executive board, all voted in favour of the $20 billion loan. China (6.08%), Russia (2.59%), Brazil (2.22%), India (2.63%) and South Africa (0.63%) together hold 14.14% of the votes in the IMF’s management (as in the World Bank, more or less). If we add the five new BRICS members, namely Indonesia (0.95% of the votes), Iran (0.74%), the United Arab Emirates (0.49%), Egypt (0.43%) and Ethiopia (0.09%), the BRICS+ hold almost 17% of the votes (for percentages, see https://www.imf.org/en/About/executive-board/members-quotas). However, with 15%, it is possible to block a decision because an 85% majority is required when voting on controversial issues. In any case, regardless of the calculation of votes, it is certain that the BRICS representatives could have opposed the decision in the discussion and made it very difficult to take, as other countries were clearly hesitant.

It is therefore grave that BRICS leaders have decided to support Milei, taking the risk of offering him the opportunity to remain in power and have a contagious effect on the rest of the region and beyond. Such an outcome could have even more dramatic consequences than those we are currently experiencing, both for the Argentine people and for many other peoples.

What is currently unfolding between Argentina, the IMF, and other creditors may prompt other governments to adopt increasingly harsh anti-social policies, as they will recognise that, even in the face of evident macroeconomic failure, they can rely on the IMF’s support.

 What role has China played?

It is essential to clarify the role of China, which stands as Argentina’s second-largest trading Market activities
trading Buying and selling of financial instruments such as shares, futures, derivatives, options, and warrants conducted in the hope of making a short-term profit. partner, significantly surpassing the United States. China accounts for approximately 15% of Argentina’s exports, while Brazil represents 20% and the United States 7-8%. The primary products that Argentina exports to China include soya and soya products, beef, wine, oil and petroleum products, and lithium. Additionally, around 15% of Argentina’s imports originate from China, primarily consisting of industrial machinery and equipment, vehicles, spare parts, and electronic products. Therefore, the relationship between China and Argentina exemplifies the dynamics between an industrialised nation (China) and a country (Argentina) that predominantly exports raw materials.
China is Argentina’s second-largest trading partner, well ahead of the United States

On the eve of the IMF’s loan to Argentina in early April 2025, China renewed a credit line for the equivalent of $5 billion to Milei’s Argentina (as it had done with right-wing President Mauricio Macri in 2018 and then with Peronist President Alberto Fernandez, who succeeded him). China has therefore also provided a lifeline for Milei. The loan granted by China will enable Milei’s government, if necessary, to make repayments to the IMF, repay other creditors, including Chinese ones, and pay part of its bill for imports of Chinese industrial products.

The Chinese credit swap enables Milei to present a positive gross foreign exchange reserves figure, despite the fact that the net level of reserves is actually negative, as indicated in a note from the rating agency Rating agency
Rating agencies Rating agencies, or credit-rating agencies, evaluate creditworthiness. This includes the creditworthiness of corporations, nonprofit organizations and governments, as well as ‘securitized assets’ – which are assets that are bundled together and sold, to investors, as security. Rating agencies assign a letter grade to each bond, which represents an opinion as to the likelihood that the organization will be able to repay both the principal and interest as they become due. Ratings are made on a descending scale: AAA is the highest, then AA, A, BBB, BB, B, etc. A rating of BB or below is considered a ‘junk bond’ because it is likely to default. Many factors go into the assignment of ratings, including the profitability of the organization and its total indebtedness. The three largest credit rating agencies are Moody’s, Standard & Poor’s and Fitch Ratings (FT).

Moody’s : https://www.fitchratings.com/ Fitch dated April 2025, which can be accessed here: [9] Trump pressured Milei not to renew his credit request from China10. But Milei was in such a desperate situation that he resisted the urgent request from his mentor Trump. China assisted Milei while also ensuring that he could continue to pay Argentina’s debt to China and manage his bills for Chinese imports. Therefore, China prioritised its economic and geostrategic interests.

In April 2025, China renewed a credit line worth the equivalent of $5 billion to Milei’s Argentina

 Conclusions

The BRICS countries have adopted a very complacent attitude within the IMF leadership towards Trump and his allies, but this has not prevented the US president from going on the offensive against them.

Javier Milei’s Argentina illustrates how inseparable international politics and finance are. In April 2025, the IMF, China, the World Bank and the IDB offered the Argentine president a $42 billion lifeline, enabling him to stave off an imminent crisis. This support, obtained under pressure from Donald Trump and validated by the BRICS+, reveals that geopolitical considerations take precedence over any economic logic of debt sustainability. Yet Argentina’s situation is alarming: record debt to the IMF, depleted foreign exchange reserves, virtually zero growth for the period 2022-2025, and a social fabric deeply weakened by austerity policies. Despite a budget surplus welcomed by creditors, popular discontent is palpable. The BRICS+ countries’ decision to support Milei, which contradicts their rhetoric of breaking with the Western financial order, confirms that their priorities remain dictated by their own commercial and strategic interests. China, in particular, has prioritised the security of its exports and receivables. Lula’s government has also prioritised its economic interests, as it is counting on IMF money to enable Milei’s Argentina to continue paying its import bills from Brazil. Ultimately, this aid guarantees Guarantees Acts that provide a creditor with security in complement to the debtor’s commitment. A distinction is made between real guarantees (lien, pledge, mortgage, prior charge) and personal guarantees (surety, aval, letter of intent, independent guarantee). neither Milei’s political stability nor the sustainable recovery of the Argentine economy. It merely postpones the deadline, at the cost of ever more unsustainable debt and continued hardship for the working classes.

The author would like to thank Demián García Orfanó, Jorgelina Matusevicius, Julio Gambina, Eduardo Lucita and Jorge Marchini for their review, comments and input. The author would also like to thank Patrick Bond Bond A bond is a stake in a debt issued by a company or governmental body. The holder of the bond, the creditor, is entitled to interest and reimbursement of the principal. If the company is listed, the holder can also sell the bond on a stock-exchange. for his collaboration. The author is solely responsible for the opinions expressed in this text and for any errors it may contain.