[stop-imf] Ecuador Refuses to Accept IMF Pressure

[Robert Weissman]

May 23, 2005 05:06 PM ET


  Ecuador Refuses to Accept IMF Pressure

QUITO, Ecuador (AP) - President Alfredo Palacio's new government will
not accept pressure to set fiscal policy according to the wishes of the
International Monetary Fund, the nation's finance minister said Monday
after meeting with an IMF delegation.

"Never will we accept someone's insinuation that we cannot make legal
reforms," Rafael Correa told reporters, "or that we must make structural
reforms that are not approved by the Ecuadorean people in a democratic
process."

Correa made the comments after meeting with an IMF mission in the Andean
nation as part of a regularly scheduled visit that will continue through
the week.

Ecuador's government has sounded a more populist tone since Congress
ousted former President Lucio Gutierrez, a fiscal conservative, and
replaced him last month with Palacio, his elected vice president, who
advocates refinancing Ecuador's foreign debt and increasing spending on
social programs.

Correa has publicly opposed the IMF's insistence on Ecuador meeting
macroeconomic targets and loan repayments. The government's economic
team planned to discuss with the IMF officials the suspension of
cost-cutting measures, including laying off public officials, a debt
buyback plan and restrictions on public spending.

Palacio's government has not signed an accord with the IMF, but needs
its approval to maintain Ecuador's credit rating with international
lenders, like the World Bank, and to finance a budget deficit totaling
about US$250 million (euro199 million).

=A9 2005 The Associated Press.