Argentine president Cristina Fernandez praised on Thursday the agreement reached with Paris Club creditors and said that the government will now turn to international credit markets to finance “infrastructure, development, and technology.”
“It is a very important day for Argentina, with the Paris Club agreement over the debt and the invitation to the BRICS summit in Brazil,” the President tweeted today.
“The financing that we will obtain will not be spent –as it has been in past decades- on the great financial casino,” she stated, “Funds for infrastructure, development, technology and for the future of all Argentines.”
The President also tweeted about Russian Foreign Minister Sergei Lavorv’s formal invitation to Argentina to attend BRICS summit to be held in Brazil in July and specified that the bloc represents 25% of the global GDP and 43% of the world’s population.
“Let me tell you. The BRICS are: Brazil, Russia, India, China and South Africa. Yesterday, our country was invited to its summit in July,” she wrote. “Our country, not this President, not for tea and scones as some very, very, very small headlines seem to suggest.”
The fact is that granting some breathing room to Argentina, the Paris Club agreement calls for a first installment of at least 1.15 billion dollars due by May 2015, followed by another payment within a year.
The group said the deal cleared the way for export credit agencies of its members to resume doing business with Argentina, which should ease making foreign investment in the country.
Buenos Aires has been eager to secure a deal that does not put too much strain on its balance of payments. Argentine central bank reserves stood at 28.6 billion as of Monday evening.
Argentina and Paris Club members came close to striking a deal in 2008 but the government pulled out at the last moment, concerned about its falling foreign exchange reserves in the midst of the global financial crisis.
Argentina wrung a major concession from the Paris Club by avoiding any International Monetary Fund involvement in the deal, which the creditor group usually requires.
The country's history with the informal group of mostly Western nations goes back to the Paris Club's origins in 1956, when Argentina agreed to meet its public creditors in Paris.