The International Monetary Fund recognizes that its largest rescue plan in history, the 57 billion U.S. dollar loan to Argentina in 2018, is part of an economic plan that is “too fragile” to solve the country’s deep-seated problems. The debts of private creditors could have benefited from capital controls and restructuring.

The International Monetary Fund’s plan went off track only a year later and was cancelled in July 2020 by the Peronist government led by the new President Alberto Fernández after paying $44 billion.

Peronists accused the fund of funding capital flight and extending loans as a political support for the failure of former President Mauricio Macri’s re-election campaign.

One International Monetary Fund internal report Deputy Director Odd Per Brekk announced on Wednesday evening that the IMF accepted the government’s overly optimistic forecast when it agreed to the plan. It described the structural reforms of the Macri government as “unambitious” [sic] And fiscal consolidation is “low quality.”

The 132-page report stated: “Government ownership is highly valued, so potential key measures-especially debt operations and the reintroduction of capital flow management measures-were excluded from the beginning.”

“In the end, the plan’s strategy proved to be too fragile for the deep-rooted structural challenges and the political realities of Argentina… Therefore, the plan failed to increase confidence and achieve its goals.”

The IMF procedures require a review of all loan programs that exceed the normal borrowing limit. The review stated that the fundamental problem of the Argentine rescue program is “lack of [investor] Confidence in fiscal and external sustainability”.

It recommends that the Fund’s future plans use more conservative macroeconomic assumptions, consider unconventional measures when necessary, strengthen the assessment of whether a country has the opportunity to enter the capital market, and consider sharing the burden in a larger loan program.

The report concluded: “Becoming the largest creditor of a relatively large country is risky for the IMF, and it may be self-defeating to promote the return of market access.”

Argentina’s current Minister of Economy, Martin Guzman, who is negotiating a new agreement with the International Monetary Fund, called the report “not enough, but it’s a step forward.”

“The fund has recognized that [bailout] Money is used to repay debts that private creditors cannot afford,” he said in a TV interview. “This is basically a bailout for creditors who came in to bet in 2016 and is also used to fund the formation of overseas assets.”

Macri’s Finance Minister Nicolás Dujovne negotiated a deal with the IMF when Christine Lagarde managed the fund, after the fund issued a report explaining the plan , He posted a series of tweets. “Due to drought, rising US interest rates and the high deficit we inherited, the agreement with the International Monetary Fund is at a special time,” he wrote. “It has the support of all the member states of the International Monetary Fund.”