MercoPress. South Atlantic News Agency

Provinces on the spot light

The International Monetary Fund, IMF, indicated this Wednesday in Buenos Aires that Argentina's access to financial aid depends largely on provincial government's budget adjustments.

"The final definition of a fiscal framework depends on firm bilateral agreements with provincial governments to enable the implementation of the pact recently signed with the federal government", reads the IMF release.

The technical IMF mission that spent two weeks and a half checking Argentina's government accounts left for Washington this Wednesday on time for the IMF Board spring meeting.

IMF believes that for any economic program to be viable, Argentine provincial governments must cut 60% their budget deficits (approximately 690 million US dollars), and faze out the non convertible bonds circulating in several districts which were printed to fill the lack of liquidity as a result of the banking crisis.

However for many provinces this could mean cutting jobs and leaving public employees redundant worsening the social climate of the country.

According to a draft global agreement with the IMF, Argentina must end the coming twelve months with a 1,4% consolidated primary surplus, equivalent to 1,2 billion US dollars.

Argentine Economy Minister Jorge Remes Lenicov leaves this week for Washington where he's scheduled to meet IMF officials, US Treasury Secretary Paul O'Neill and Alan Greenspan President of the Federal Reserve. Mr. Remes Lenicov believes an agreement with the IMF can be reached in the first half of May and 9 billion US dollars will be available.