A rchive Date
[ 11-09-2003 ]
Category
[ International Relations ]
sub-Categoy
[ Argentina ]
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[http://cnews.canoe.ca/CNEWS/World/2003/09/10/182528-ap.html
Argentina and IMF reach accord on three-year, $21B aid package
By BILL CORMIER
Wed, September 10, 2003
BUENOS AIRES (AP) - President Nestor Kirchner announced Wednesday that Argentina has reached agreement with the International Monetary Fund on the outlines of a three-year, $21-billion debt refinancing package.
The deal ended months of negotiations and came a day after Argentina defaulted on a $2.9-billion debt payment to the IMF - the largest ever by a country. "This accord will strengthen Argentina and help spur economic recovery," Kirchner said. Argentina had sought a long-term IMF agreement to help bolster its standing with investors and restructure $103 billion in public debt it defaulted on in December 2001 at the height of a deep economic crisis.
In recent months, the economy has stabilized after a turbulent period that forced a currency devaluation and a $143-billion debt default overall.
In Washington, IMF chief spokesman Thomas Dawson and U.S. Treasury officials had no immediate comment.
Argentina, its economy still badly bruised by the 2001 crisis, skipped a $2.9-billion debt payment that came due Tuesday rather than dip into its reserves, leaving the country in default to the IMF. It wasn't unclear when repayment would be made despite the announced accord.
Argentine officials have spent months pursuing a long-term IMF agreement to restructure the $103 billion in public debt it defaulted on in December 2001. Talks momentarily stalled last week after the IMF insisted the government implement deeper economic reforms.
The IMF had repeatedly called for Argentina to overhaul the banking sector, compensate banks for losses and hike public utility rates that were frozen since a bruising currency devaluation in 2002.
At a news conference, Kirchner said the final agreement did not include a timetable initially sought by the IMF to impose utility rate increases. For weeks, he had balked at passing on such increases to recession-weary Argentines, saying the costs threatened to suffocate the economy.
Economy Minister Roberto Lavagna said the agreement also calls for the refinancing of Argentina's debt coming due by August 2006.
He said the refinancing includes nearly $12.4 billion owed to the IMF, some $5.62 billion destined for the World Bank and the Inter-American Development Bank. He said little more than $3 billion was also owed to European lenders and other multilateral lenders.
 World Fact Book (CIA)]
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