[stop-imf] IMF-Argentina back in business

[Robert Weissman]

Friday, 24 January, 2003, 19:20 GMT
IMF seals debt deal with Argentina

 http://news.bbc.co.uk/go/em/fr/-/1/hi/business/2692841.stm


The International Monetary Fund (IMF) has agreed to re-schedule debt
owed by Argentina, after a year of talks.

The deal amounts to a $6.78bn loan package, which should give Argentina
some breathing space to sort out its ailing economy.

Under the deal, the Fund has approved a short-term credit line of almost
$3bn to repay debts to multilateral organisations that could not be
postponed.

The IMF has also extended a deadline until 31 August for repayment of a
further $3.8bn in debt to the Fund itself.

The deal had been expected after IMF managing director Horst Koehler
said last week that he would recommend approval of stop-gap financing
for Argentina.

'Very happy'

Approval of the deal was announced at the World Economic Forum in Davos,
Switzerland.

"I am happy to tell you that the deal has been done," French Economy
Minister Francis Mer told BBC News Online and other reporters in Davos.

"The past uncertainty connected with Argentina is over. I am sure that
with the full commitment of both parties they should be in a position to
restore the
confidence [lost] in foreign investment."

During a year of complex and often frustrating negotiations between the
IMF and Argentina, it looked at times as if relations would break down.

"In my view, [the IMF] have not helped us amid the worst moment in our
history and they have been hostile toward us," President Eduardo Duhalde
said in a
recent interview.

IMF officials were also greeted with angry protests on the streets of
Buenos Aires, as Argentines blamed foreign interference for some of
their woes.

Indebted

A more comprehensive debt deal is expected to be negotiated after the
country's general elections in April.

The deal should provide Argentina with some relief until the new
government is elected.

Argentina is experiencing its worst economic crisis in decades and is in
default on loans with most major international donors.

Earlier this month Argentina defaulted on a $681m debt payment to the
Inter-American Development Bank.