In 1992, during Bill Clinton's presidential campaign, strategist James Carville hung a poster in the campaign headquarters that bore a phrase that would make history: “It’s the economy, stupid.” A simple and direct message to not lose focus in the campaign: the emphasis needed to be solely on the economy. Thirty years later, in Argentina, that maxim warrants a local adaptation: today it's not —only— the economy, “it's trust, stupid.” Trust in institutions, in rules, and in the word of the State.
In Argentine politics, discussing debt is still incredibly taboo. It's a divisive issue because it's approached ideologically and rarely with the technical calm it deserves. However, in the real world —the world of banks, funds, and large investment firms— debt is not a dirty word: it's a tool. And like any tool, it can be used well or poorly.
President Javier Milei seems to have understood that point. By maintaining a strict compliance policy with international organizations and showing a willingness to honor maturities, the government is not looking to “please the market,” but to rebuild Argentina's most damaged asset: trust.
The value of fulfilling commitments
While a sector of Argentine politics sees “default” as an alternative, in global financial forums, this word does not only cause economic losses: it destroys credibility. Every time Argentina breaks an agreement or postpones payments without a clear strategy, it loses more than just access to credit; it loses reputation. And in economics, reputation translates into higher interest rates, less investment, and greater vulnerability.
Honoring commitments does not mean paying everything immediately —which is materially impossible— but rather showing will, consistency, and the capacity to refinance in an orderly manner. In the global financial system, debts are rarely canceled: they are kicked down the road, but in a predictable, negotiated, and credible manner.
When we talk about “kicking the debt,” we are essentially considering this action as a legitimate tool that involves refinancing under better conditions, with reasonable rates and clear terms. “Reprofiling” or restructuring improvisedly, on the other hand, equates to admitting that control has been lost and that we are simply improvising. Serious countries renegotiate; those who improvise merely reprofile.
The global market does not vote, it evaluates
While we live through nerve-wracking hours before the upcoming legislative elections, international banks like JP Morgan or Citi analyze more on Monday the 27th. What they care about is not who wins, but how the country reacts the next day: whether there is coherence in the cabinet, whether signals of institutional continuity are sent, whether the Central Bank can sustain the exchange rate, and, above all, whether the Treasury can meet its payment calendar.
In that sense, President Milei's meeting with the JP Morgan board and the recent $20 billion swap agreement with the U.S. Treasury are not just economic facts: they are signals of trust. They indicate that, despite the fragility of reserves, Argentina has international interlocutors willing to give it leeway, as long as it maintains fiscal discipline and political predictability.
Politics thinks about winning elections while postponing the long term
We have spent decades discussing who took on debt, at what rates, with which entity or allied country, hoping that if we manage to change the name of the debt to that of a politician, it will somehow disappear. A mistake into which we have invested many years without getting anywhere.
Javier Milei assumed the presidency with Argentina's risk premium at nearly 2000 points, and in a matter of months, was able to reduce it to 800, and today it stands at 1000. This is also celebrated from the market perspective. The challenge for the coming years will be to transform debt policy into a state policy. This implies: unifying criteria on what type of debt we want to issue, promoting a national capital market that reduces dependence on external financing, and generating institutional predictability so that restructurings are the exception rather than the rule.
With the RIGI now underway and investments estimated at over $100 billion in just two years, the country is once again at a key opportunity. The current scenario offers us the chance to maintain a clear and defined course with a vision of attracting investments that will continue to enhance Argentina, or to return to a futile struggle as was the fight against capital. How much trust will be gained in the world post-elections will start to be seen this Sunday night.
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