UK will block IADB and World bank loans to Argentina because of financial ‘misconduct’
UK joined the group of countries that vote against granting multilateral organizations’ loans to Argentina as a form of protesting the mistrust generated by the government of President Cristina Fernandez recurrent international misconduct, reports the Buenos Aires media.
Following on a similar decision from the administration of President Barack Obama over a year ago, the UK announced it has decided to block Inter American Development Bank and World Bank loans until Argentina reviews its international financial ‘misconduct’.
“The policy will remain subject to review until the time in which in the future the actions from the Argentine government prove it is willing to abide with its international obligations”, said Justine Greening, UK International Development Secretary.
Arguments are very similar to those which in September 2011 were presented by the head of the International Affairs Office from the US Treasury, Marisa Lago. The difference is that UK detailed the list of Argentina’s non compliance of its obligations as member of the IMF. It also includes the IMF latest ‘declaration of censure’ because of the inaccuracy of its stats and breach of obligations.
“The IADB and WB available development funds are scarce: We must ensure they are adequately used, but given recent attitudes from Argentina, we are not sure that this country will do so”, argued Greening.
Other points mentioned in the UK report are Argentina’s non compliance with World Bank arbitrations (International Centre for Settlement of Investment Disputes) and the explicit decision to ignore obligations as active member of the IMF. Mainly the verification of the country’s stats as established in Article IV of the IMF charter. Since 2007 when IMF started to question Argentina stats, the Kirchner administrations have rejected the annual review.
“All this undermines significantly the possibility of seriously evaluating granting loans” and thus the instructions to UK representatives in the IADB and WB to vote against loans for Argentina. However as with the US, the UK will reserve the right to vote in favour of those loans aimed to improve poorest people’s living conditions, the Buenos Aires-based newspaper said.
So far the blocking votes have not impeded the approval of any credit, particularly with the IADB, where Argentina has strong support, but the same can’t be said of the WB which has seen negotiations for a new package of loans delayed.
Other countries have adopted a similar policy regarding credits from multilateral organizations. One of them is Spain, following the nationalization of Repsol’s majority stake in oil and gas company YPF. “We will press at all possible places we can” said Economy minister Luis de Guindos at the time. Germany and Italy have also objected to some loans and voted against them, but not as an explicit predetermined policy.