Tom Boggioni
October 21, 2025
RAW STORY
A Donald Trump proposal to bail out struggling Argentina with a $40 billion loan is bumping up against economic reality with banks being asked to provide half of the amount demanding collateral or federal assurances.
According to a report from the Wall Street Journal, financial institutions, including JPMorgan Chase, Bank of America and Goldman Sachs, are “struggling” to come up with a loan they would feel comfortable with.
With Trump pushing to assist Argentine President Javier Milei’s government, the plan was to create a financial package made up of a “$20 billion currency swap with the U.S. Treasury Department and a separate $20 billion bank-led debt facility,” the Journal is reporting.
According to the report, it is turning out to be far easier to make the proposal than it is to make it a reality.
“While banks normally arrange these types of rescue facilities on their own, Treasury has been controlling the broader package and banks feel they can’t act without backing from Washington, some of the people said," the Journal reported.
"The loan facility hasn’t been finalized and might not come together if the banks’ collateral question isn’t resolved, they said. U.S. banks haven’t been lending to Argentina, and the country has been shut out of the international capital markets for years.”
The report adds that Argentina has already been the recipient of 20 bailouts from the International Monetary Fund (IMF) since the 1950s — and that has bankers nervous.
There is also a risk to the U.S Treasury which would “swap $20 billion for a roughly equivalent amount of Argentine pesos,” which are rapidly depreciating.
According to Brad Setser, a former deputy assistant Treasury secretary for the Obama administration, ”The risks from these operations are unusually large. Should the peso depreciate, which many think is not only likely but necessary, the Treasury would be left holding assets that have fallen in value.”
Crisis-hit Argentina inks $20 bn rescue with US
By AFP
October 20, 2025
Argentina's President Javier Milei gestures as he addresses supporters, during a campaign rally at Tres de Febrero, Buenos Aires province, on October 17, 2025. - Copyright AFP/File Patrick T. Fallon
Martín RASCHINSKY
Argentina and the United States signed off on a $20 billion financial lifeline Monday, hoping to avert economic meltdown and boost President Javier Milei ahead of tough legislative elections.
President Donald Trump has plied Argentina with political and economic support ahead of the October 26 vote, which will decide whether his close ally Milei can force through labor, tax and pension reforms.
Milei, once a global poster boy for budget-slashing libertarian politics, is on the ropes as Argentines head to the polls.
Many of his reforms are languishing, his popularity is falling and he is battling to avoid devaluing Argentina’s currency, the peso, before the vote, fearing that would drive up consumer prices.
But markets see the peso as substantially overvalued, forcing Buenos Aires to use scant foreign reserves to defend its value.
Now his friend in Washington has agreed to step in with a long-mooted $20 billion plan.
Trump has also pledged another $20 billion in public and private funds to help Argentina weather market turmoil, conditional on a strong electoral showing by Milei.
“If he loses, we are not going to be generous with Argentina,” Trump said as he hosted Milei at the White House earlier this month.
Milei outlined details of the bailout in an interview with Channel 8 that aired Monday, saying it would only be activated if needed.
– ‘Remote control’ –
Trump’s support for Milei has raised eyebrows in Washington, where Argentina is seen as neither a vital trade nor security partner.
US exports to Argentina are worth about $9 billion a year, versus $28 billion worth of exports to Colombia.
In contrast to his support for Milei, Trump has vowed to cut aid and security support to Colombia because of a spat with leftist President Gustavo Petro.
Facing criticism in the United States, Trump snapped at a reporter on Sunday as he justified his largesse.
“They’re fighting for their life. Do you understand what that means? They have no money. They have no anything.”
Last week, the US Treasury intervened by buying up pesos, but failed to stop the currency’s decline.
Argentina’s opposition has also slammed Trump’s intervention.
“The economy is being run by remote control from the United States,” former president Cristina Kirchner said Friday from her Buenos Aires apartment, where she is under house arrest for corruption.
US intervention has so far failed to halt the dollar’s surge against the peso: the greenback broke through the upper band of the exchange rate on Monday, hitting 1,495 pesos.
Since Milei’s allies were defeated in Buenos Aires province legislative elections in September the peso has lost seven percent of its value against the dollar.
Most economists expect the government to make moves toward devaluation after the election.
By AFP
October 20, 2025
Argentina's President Javier Milei gestures as he addresses supporters, during a campaign rally at Tres de Febrero, Buenos Aires province, on October 17, 2025. - Copyright AFP/File Patrick T. Fallon
Martín RASCHINSKY
Argentina and the United States signed off on a $20 billion financial lifeline Monday, hoping to avert economic meltdown and boost President Javier Milei ahead of tough legislative elections.
President Donald Trump has plied Argentina with political and economic support ahead of the October 26 vote, which will decide whether his close ally Milei can force through labor, tax and pension reforms.
Milei, once a global poster boy for budget-slashing libertarian politics, is on the ropes as Argentines head to the polls.
Many of his reforms are languishing, his popularity is falling and he is battling to avoid devaluing Argentina’s currency, the peso, before the vote, fearing that would drive up consumer prices.
But markets see the peso as substantially overvalued, forcing Buenos Aires to use scant foreign reserves to defend its value.
Now his friend in Washington has agreed to step in with a long-mooted $20 billion plan.
Trump has also pledged another $20 billion in public and private funds to help Argentina weather market turmoil, conditional on a strong electoral showing by Milei.
“If he loses, we are not going to be generous with Argentina,” Trump said as he hosted Milei at the White House earlier this month.
Milei outlined details of the bailout in an interview with Channel 8 that aired Monday, saying it would only be activated if needed.
– ‘Remote control’ –
Trump’s support for Milei has raised eyebrows in Washington, where Argentina is seen as neither a vital trade nor security partner.
US exports to Argentina are worth about $9 billion a year, versus $28 billion worth of exports to Colombia.
In contrast to his support for Milei, Trump has vowed to cut aid and security support to Colombia because of a spat with leftist President Gustavo Petro.
Facing criticism in the United States, Trump snapped at a reporter on Sunday as he justified his largesse.
“They’re fighting for their life. Do you understand what that means? They have no money. They have no anything.”
Last week, the US Treasury intervened by buying up pesos, but failed to stop the currency’s decline.
Argentina’s opposition has also slammed Trump’s intervention.
“The economy is being run by remote control from the United States,” former president Cristina Kirchner said Friday from her Buenos Aires apartment, where she is under house arrest for corruption.
US intervention has so far failed to halt the dollar’s surge against the peso: the greenback broke through the upper band of the exchange rate on Monday, hitting 1,495 pesos.
Since Milei’s allies were defeated in Buenos Aires province legislative elections in September the peso has lost seven percent of its value against the dollar.
Most economists expect the government to make moves toward devaluation after the election.
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