- The Washington Times - Tuesday, March 9, 2004

BUENOS AIRES (AP) — Argentina and the International Monetary Fund (IMF) reached an agreement yesterday for the repayment of $3.1 billion owed to the global lender, a government official told the Associated Press.

President Nestor Kirchner’s government issued the order to make the payment due yesterday, said the source, who spoke on the condition of anonymity.

Details of the accord were not made public. Neither the IMF nor Mr. Kirchner’s government would comment. The government said it would release a statement today.

The deal came after days of testy negotiations between Mr. Kirchner’s government and the Washington-based lending agency.

Mr. Kirchner had said he would make Argentina’s latest debt payment only if the IMF first sent signals that it would approve an upcoming report on the nation’s economic progress as part of a financial accord the two reached last year.

Argentina is facing its second economic-progress report as part of a review of a three-year, $13.3 billion loan package arranged with the IMF in the wake of its 2001-02 economic collapse.

The review, if approved by the IMF’s board of directors, would allow Argentina to get back most of the $3.1 billion it was required to pay the IMF by the close of banking yesterday.

The IMF has been pressing Argentina to move more quickly in restructuring about $100 billion in defaulted debt — a legacy of the country’s economic debacle.

Mr. Kirchner’s government says it wants its creditors to accept a 75 percent reduction in the face value of the foreign debt, a proposal that IMF officials and many creditors have rejected.

The official said a breakthrough came during telephone contact between Argentina and the IMF in Washington. The independent Argentine network Todo Noticias said it was a “friendly” half-hour call between Mr. Kirchner and the IMF’s acting managing director, Anne Krueger.

Riordan Roett, an Argentina expert at Johns Hopkins University, said both sides had compelling reasons to avoid a long impasse.

“The key issue is that the IMF is in a trap. [Argentines] have to continue with the review process and release the funds needed to repay the IMF,” Mr. Roett said.

Argentina defaulted on a $2.9 billion loan owed to the IMF last year, but eventually paid it after reaching a new long-term deal with the global lender.

After four years of recession, Argentina’s economy grew 8.4 percent in 2003, according to preliminary government statistics. Forecasts call for growth of 6.9 percent in 2004, although the jobless rate is expected to remain in double digits.

The debt remains a divisive issue in Argentina as some argue the government should embark on talks in earnest with its creditors. Others insist that the cash-strapped government first use funds to boost job creation and alleviate social inequalities left by the crisis.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide