[stop-imf] CEPR: No Argentine Default...For the Moment

[Robert Weissman]

CENTER FOR ECONOMIC AND POLICY RESEARCH
FOR IMMEDIATE RELEASE

CONTACT:
In Washington, DC:
Mark Weisbrot    (202) 746-7264 (cell)
(202) 293-5380 x228
In Buenos Aires:
Alan Cibils    011-54-11-4864-0313
011-54-9-5422-4617 (cell)

Wednesday, March 10, 2004

No Argentine Default=85 For the Moment
Payment and Agreement not likely to solve Argentina=92s economic woes

After much public anticipation of an Argentine default on its latest $3.1
billion payment to the IMF, a last minute compromise was reached where
Argentina will avoid a default by dipping into its foreign exchange
reserves. Argentina=92s payment to the IMF preserves the current agreement,
signed last September; however, the overall terms of the IMF agreement are
not likely to improve Argentina=92s economic situation. In particular, the =
IMF
has taken on the role of advocate for Argentina=92s defaulted private
bondholders, urging Argentina to speed up negotiations and reduce the
proposed 75% haircut. Argentina=92s total debt burden, even if the 75% hair=
cut
stuck, is still a whopping 90% of GDP.

What is ahead for Argentina and the Fund? According to CEPR Senior Research
Associate Alan Cibils, the IMF should expect an even greater likelihood of
default when the next review comes at the end of June, which will
include a
renegotiation of the agreement=92s primary fiscal surplus objectives. The I=
MF
has made it clear that it expects Argentina to increase its current 3 per
cent of GDP primary surplus in order to increase its debt service payments.
=93The Kirchner Government knows it can live without the IMF. Although the =
IMF
policy prescriptions contributed significantly to the severe
recession/depression that began in mid-1998=94, he said, =93the country rec=
eived
no help from the IMF from the time of its financial collapse in December of
2001 until the most recent agreement was reached in September 2003.=94

CEPR co-director Mark Weisbrot and CEPR Senior Research Associate Alan
Cibils, both co-authors of various CEPR reports on Argentina, are available
for interviews or briefings. For more background information on CEPR=92s
research on the Argentine economy, see the following papers:

Argentina's Crisis: The Costs and Consequences of Default to the
International Financial Institutions by Mark Weisbrot and Alan Cibils,
November 19, 2002. http://cepr.net/argentina_crisis.htm
Argentina Since Default: the IMF and the Depression by Alan Cibils, Mark
Weisbrot and Debayani Kar, September 4, 2002.
http://www.cepr.net/argentina_since_default.htm
The Role of Social Security Privatization in Argentina's Economic
Crisis, by
Dean Baker and Mark Weisbrot, April 17, 2002.
http://www.cepr.net/argentina_and_ss_privatization.htm

###

Todd Tucker
International Programs
Center for Economic and Policy Research
1621 Connecticut Ave., NW; Suite 500
Washington, DC 20009
Phone: 202-293-5380, ext. 213
Fax: 202-588-1356
tucker@cepr.net
www.cepr.net