IMF Director to Meet Argentine President.
The head of the International Monetary Fund will visit Argentina to get acquainted with its new president later this month as a prelude to negotiations over new loans.
IMF Managing Director Horst Koehler will be in Buenos Aires on June 23-24 for meetings with newly installed Argentine President Nestor Kirchner.
Thomas Dawson. IMS spokesman stressed that the discussions would not be a negotiating session but more of a listening session for the IMF to hear the new government's views of how it will deal with the worst economic crisis in its history.
He said all options for providing further IMF assistance would be on the table, ranging from extending a current interim loan program, due to expire at the end of August, to beginning negotiations for new loans.
Another IMF official indicated Thursday that when negotiations do begin in earnest, many of the issues that will be discussed will be the same issues that put the agency at loggerheads for months with the government of former President Eduardo Duhalde.
IMF Deputy Managing Director Anne Krueger, speaking at a conference on international economics at the State Department, said Argentina needs to deal with the government budget, the country's banking system, the restructuring of foreign debt and utility pricing.
Argentina's economy has stabilized in recent months after a chaotic period last year in which the country froze banking accounts and devalued its currency after being forced into a record debt default, halting payments on a large portion of its $141 billion in foreign debt.
Krueger said the likely duration the current period of economic stability "is open to judgment," warning that the country's banking system is still "by no means viable at the moment."
Krueger said the banking system still faces a major shortfall in resources because the government chose to convert deposits in banks at a more favorable exchange rate than the conversion rate it allowed for loans owed to banks.
Dawson, who met reporters at a regular IMF press briefing after Krueger spoke, insisted that the 184-nation lending institution did not view any of the issues confronting Argentina as a "deal breaker."
Dawson said the IMF board is expected before the end of this month to consider approval of a second loan instalment to Argentina as part of the $6 billion interim loan program that the IMF provided in January.
That program, which essentially allowed past loans to the IMF and other international organizations to be rolled over, was expected to be followed by a new IMF program that will provide fresh money to help Argentina get its economic house in order.
However, there have been published reports in Argentina that Kirchner's government may seek an extension of the current interim loan agreement to give it more time to negotiate a new loan program with the IMF.
The IMF and the Duhalde government had a rocky relationship, bickering for nearly a year over new loans after Argentina defaulted on the bulk of its foreign debt in December 2001.
Argentine Finance Minister Roberto Lavagna, who holds the same position in the new government that he did under Duhalde, met for an hour Thursday in Washington with Treasury Undersecretary John Taylor, the Bush administration's point man on international finance issues. On Tuesday, Secretary of State Colin Powell met with Kirchner in Buenos Aires following an Organization of American States foreign ministers meeting the day before in Santiago, Chile. Powell told reporters the United States "stands ready to help" in Argentina's economic recovery.
Bush's first Treasury secretary, Paul O'Neill, sparked an uproar in Argentina by suggesting last year that the United States did not want to see taxes paid by American "plumbers and carpenters" wasted on ill-conceived IMF loan programs for Argentina.