MercoPress. South Atlantic News Agency

IMF and Argentina closer

Argentina and the IMF delegation currently in Buenos Aires agreed to find a monitoring and control mechanism to ensure that the targets of the “federal fiscal” pact and honored and provincial deficits are effectively reduced.

The understanding follows a first meeting between Deputy Economy Minister Jorge Todesca and the head of the IMF mission, Anoop Singh who arrived in Buenos Aires last Monday. The Argentine central government has managed to comply with most of the IMF requests regarding a sustainable economic program, budget and monetary objectives, but the main stumbling block have been the provincial governments who stubbornly have repeatedly refused to cut expenditure and even print their own money. The IMF is demanding that the overall provincial budget deficit be cut by 60% in the next twelve months. Governors argue that because of the four years recession most provinces are under going explosive social situations that "could detonate any moment". But it's also true that several of them are presidential hopefuls for next year's scheduled national elections. Apparently Mr. Todesca and Mr. Singh agreed on a tentative program to rescue bonds that circulate as money in the provinces of Buenos Aires, Córdoba and Mendoza that are considered by IMF as the most critical. The bond rescue plan is under consideration and should be ready for when the IMF delegation returns to Washington next April 17th. The provincial bonds together with a national circulation bond, all of them defined as "quasi money", represent a third of money circulation in Argentina. "We're making progress in the discussions, and have complied with all previous conditions. All is evolving normally", said the head of the Argentine cabinet Jorge Capitanich. Argentine officials seem more optimistic, particularly if the provincial stumbling block can be overcome, and are hoping for renewed IMF aid next May.