- The Washington Times - Thursday, November 1, 2001

BUENOS AIRES (AP) Argentine President Fernando De la Rua, facing growing investor fears of a possible default or devaluation, worked yesterday to complete a debt restructuring package that some on Wall Street worry will do little to ease his country's economic crisis.
After repeated international bailout packages, Argentina continues to falter despite seven government attempts to turn the corner on the debt crisis.
Investors worry that Argentina's financial troubles could spill over into other Latin American economies at a time when emerging markets across the globe are struggling in the aftermath of the September 11 terrorist attacks on the United States.
The president also met with provincial governors over efforts to balance the national budget, seeking a new tax-revenue-sharing plan that would help reduce public spending as the cash-strapped government struggles under the burden of $132 billion in debt.
Shares on the Buenos Aires Stock Exchange bobbed slightly higher yesterday as investors awaited a series of measures, including the governor's tax agreement and a separate recovery package that could include a plan to swap billions of dollars in Argentine debt. The Merval Index was up 1.4 percent to 226.70.
Debt payments of $1.1 billion is due this month and another $774 million in December, the government has said.
Struggling to pay billions of dollars in yearly debt-servicing payments, Mr. De la Rua and Economy Minister Domingo Cavallo are seeking to restructure the country's debt load by offering greater payment guarantees to creditors in exchange for lower interest rates.
It isn't clear if foreign lenders would be willing to accept such a move, which Mr. Cavallo's team has characterized as a "voluntary" swap with its bondholders.
Credit agencies are warning the deal might be considered a default and Argentine markets slumped on Monday after Mr. Cavallo said a deal in the works would include foreign credits.
Such a debt swap would probably require some backing from the international financial community, particularly the United States.
The Bush administration in August tepidly supported an $8 billion loan for Argentina from the International Monetary Fund.
For the second time in more than a month, Standard & Poor's lowered Argentina's creditworthiness late Tuesday amid concerns the government will be unable to come up with enough money to pay its creditors on time.
With fears of a possible debt default gaining momentum in recent days, Argentine bonds have tumbled to their lowest levels in six years on some markets.
A 40-month recession has cut into Argentina's ability to generate badly needed revenue from taxes. In September, tax receipts slumped 14 percent and many analysts are expecting it to continue to slide between 8 percent and 10 percent in October.

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