A rchive Date
[ 19-06-2005 ]
Category
[ International Relations ]
sub-Categoy
[ Argentina ]
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[http://canoe.ca/CNEWSTopNews/imf_apr20-ap.html
Argentina asked to work with IMF
By HARRY DUNPHY-- Associated Press
Saturday, April 20, 2002
WASHINGTON (AP) - Argentine Economy Minister Jorge Remes Lenicov said Saturday that two obstacles were blocking his crisis-hit country from securing new rescue loans from the International Monetary Fund.
Remes also said it would take 45 days to draft a plan to overhaul the banking sector, which the government shuttered late Friday as the country's economic crisis worsened.
"We are trying to construct a normal country and do what others have done in similar situations," he said in an address to the IMF's Financial and International Monetary Committee, according to a transcript provided afterward.
"We request your patience and understanding while we confront a situation of great volatility in the markets," Remes said.
He said Argentina has made progress in its talks with the IMF but that differences remained over provincial spending and foreign exchange policy.
The IMF suspended a $22 billion bailout package in December after Argentina, in recession for four years, missed its fiscal deficit target.
The country subsequently defaulted on its $141 billion debt and devalued its currency. The IMF estimated on Thursday that the economy could contract another 10 percent to 15 percent this year.
In a radio address in Buenos Aires on Saturday, President Eduardo Duhalde told Argentines to prepare for more tough times.
"We run the risk that the financial system could collapse," said Duhalde, Argentina's fifth president since December.
The world's leading industrialized nations expressed concern about Argentina's growing financial problems and urged the country to work closely with the IMF to implement economic reforms.
In their statement, the ministers from the United States, Canada, Britain, France, Germany, Italy and Japan said:
"The situation in Argentina is of serious concern. Reforms of the fiscal framework encompassing the provinces, establishing a monetary anchor and improving the bankruptcy and economic subversion laws will all help to restore investment and growth."
It said these steps would raise the living standards of the Argentine people.
"We thus support the IMF and the work it is doing with Argentina," the statement said.
On Friday the government in Buenos Aires ordered a halt to all foreign exchange and banking transactions, saying it needed time to set up a plan to bolster the troubled banking system.
"We urge the Argentina authorities to work closely with the IMF to put a comprehensive reform plan into place," said Treasury Secretary Paul O'Neill.
Spanish Finance Minister Rodrigo Rato, leading a delegation from the European Union to the spring meeting of the International Monetary Fund, said he believed the IMF and Argentina were close to a deal that would unlock perhaps $9 billion in new IMF loans. But he said the country's provincial governments would have to better manage ballooning budget deficits.
However, French Finance Minister Laurent Fabius, who met with Remes on Friday, expressed more pessimism.
He said the Argentine government still had not met commitments it had made on economic reforms and its decision on Friday to shut down its banking system was "very worrying."
 World Fact Book (CIA)]
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