MercoPress. South Atlantic News Agency

US congress moves to block development loans to Argentina

The Obama administration has already voted against loans to Argentina

United States lawmakers are trying to block development loans to Argentina and seek out allies to pressure President Cristina Fernandez to settle with holders of defaulted debt in exchange for funding development banks.

The measures are attached to a bill that authorizes a combined 1.4 billion dollars capital increase at development banks over several years, including the World Bank. The House Financial Services Committee’s panel that oversees development banks approved Wednesday the proposed legislation, which would then require a vote by the full committee.

Under the proposed legislation, US directors at the World Bank and the Inter-American Development Bank should “oppose any loan to the government of Argentina” and “initiate discussions with other executive directors at the respective bank to advocate and vigorously promote efforts to encourage Argentina to normalize relations with its official and private creditors and elsewhere in the international community.”

The US has already started to vote against loans to Argentina in the strongest move to date against Cristina Fernandez, who polls show will win a second, four-year term in the Oct. 23 presidential election.

The goal is to have Argentina make payments owed investors and settle with holders of defaulted debt, as well as respect obligations with institutions such as the International Monetary Fund.