(Bloomberg) -- Argentine President-elect Alberto Fernandez’s stance on Venezuela may pose another challenge to his ability to renegotiate the terms of an aid package from the International Monetary Fund.

An imposing debt load and uncertainty about his economic policies already limit Fernandez’s room for a renegotiation of the record credit line, but his views on the Venezuelan regime of Nicolas Maduro are also softer than those of outgoing Mauricio Macri.

A more sympathetic approach toward Maduro could hurt Argentina’s standing with President Donald Trump, who has put Venezuela among his priorities in Latin America. The U.S. holds the most influence at the IMF as its biggest shareholder and was key in the approval of the $56 billion package given to Macri last year amid a sharp currency crisis.

“Whatever policy the new government decides to do with Venezuela will have repercussions in the bilateral relationship with the U.S.,” said Hector Torres, a former IMF executive director from Argentina who represented South American countries. “Argentina depends heavily on the IMF and the U.S. has a lot of interest in Venezuela right now.”

During the campaign, Fernandez suggested Argentina could leave the Lima Group, an ad-hoc outfit created in 2017 by nations seeking free elections in Venezuela, and align with Mexico and Uruguay, which have taken a less confrontational approach. He’s also demurred on calling Venezuela a dictatorship -- a term Macri has repeatedly used. A week after beating Macri in the election, Fernandez has yet to comment specifically on his policy for the country stricken by a deep humanitarian and economic crisis.

IMF’s Georgieva Conditions Argentina Talks on Policy Framework

Fernandez’s campaign didn’t provide comment for this story, but at a press conference Monday he reiterated his view that the IMF is partly responsible for Argentina’s economic crisis and skirted a question on Venezuela, saying “everybody knows” what he thinks about that country. One of his top foreign policy advisers, Felipe Sola, said earlier Monday that Fernandez’s stance on Venezuela won’t change because of the IMF negotiations.

A U.S. State Department spokesperson for Western Hemisphere Affairs said “the crisis in Venezuela has already formed part of the discussion with the new Argentine team, and we hope to work together to help Venezuelans recover the democracy and rule of law they are being denied.”

A spokesperson for the Fund said “the decision to support a country’s economic program with IMF lending is a prerogative of the IMF’s Executive Board which represents the 189 members of the Fund.”

Mexico Visit

Fernandez made his first international trip as president-elect to Mexico on Monday and met with President Andres Manuel Lopez Obrador, a leader who has tried hard to keep a distance from the Lima Group, calling for a peaceful resolution in Venezuela without labeling Maduro a dictator.

If Fernandez adopts a similar middle-ground stance when he takes office, it wouldn’t go well with the U.S., said Benjamin Gedan, a former White House National Security Council director for South America in the Barack Obama administration.

“It would likely provoke a negative response from the Trump administration, and potentially jeopardize U.S. support, including at the IMF,” he said from Washington. “That’s particularly because President Trump is a very transactional leader.”

Gedan points out that Argentina’s relationship with the U.S. doesn’t hinge on many other issues beyond the IMF and Venezuela. That leaves Fernandez, who swears in on Dec. 10, with few alternatives to appease the U.S.

On Friday, Trump called Fernandez to congratulate him and said he asked the IMF to work with the incoming government. Fernandez told Trump he hoped they’ll have a “cordial” relationship, according to a statement distributed by the president-elect press team in Argentina. The White House readout of the call made no mention of the IMF.

What Can Argentina Learn From Brazil 2002? Actions Over Words

Economic Policies

To be sure, the IMF will negotiate with Argentina through the prism of economic policies, not foreign policy, said Claudio Loser, an Argentine who served as the Fund’s western hemisphere director between 1994 and 2002. Closer ties with Venezuela would increase tensions in case Fernandez comes up with a “very undisciplined” economic program, but wouldn’t be enough to derail the program, he said.

“The Argentines will have to go beyond just having closer relations with Venezuela for the IMF to withhold their help,” Loser said.

Argentina’s Economic Team: Who’s on Fernandez’s Radar

Sticking to Macri’s Venezuela policy isn’t much easier for Fernandez. His running mate, former President Cristina Fernandez de Kirchner, was one of Venezuela’s top allies when she governed for eight years until 2015, at one point even giving Maduro the country’s top honor. Maintaining Macri’s confrontational policy would reflect on Fernandez’s judgment as president and likely anger her noisy radical left base.

Torres, the former IMF official, says there is a chance Fernandez’s strategy may embody a phrase made famous by Juan Peron, Argentina’s three-time president last century and founder of the political movement Peronism: Put your left turn signal on, but then go right.

“Part of what Alberto Fernandez is doing in visiting AMLO and giving signs that the Lima Group isn’t his favorite -- that’s putting on the left turn signal, but he may turn the steering wheel to the right,” said Torres. “I’m optimistic that Fernandez is pragmatic.”

(Adds Fernandez and adviser’s comments in 6th paragraph; updates 9th paragraph to reflect meeting occurred)

--With assistance from Nick Wadhams.

To contact the reporter on this story: Patrick Gillespie in Buenos Aires at pgillespie29@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, Walter Brandimarte

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