MercoPress. South Atlantic News Agency

How to weaken a president

The IMF mission currently in Buenos Aires discussing the resumption of credit to Argentina increased demands regarding financial and banking reforms, while the Duhalde administration, limited in its political support, must also address growing differences between the Economy Ministry and the Central Bank.

Insistent rumors about the political standing of President Eduardo Duhalde forced the last Friday a release from the US embassy in Argentina denying Washington was demanding anticipated presidential elections, --scheduled for September 2003--, plus an unexpected visit, that extended for an hour and a half, of Ambassador James Walsh to Mr. Duhalde.

And while the Argentine government is immersed in discussions with the IMF team headed by British born John Thorton, another internal dispute surfaced in the government: Central Bank president Mario Blejer and Economy Ministry Roberto Lavagna can't agree on a coherent monetary program and the banker is also demanding legal protection.

All three predecessors of Mr. Blejer in the Central Bank, Roque Fernández, Pedro Pou and Roque Macarone, are facing legal actions for having extended financial aid to troubled banks and the former IMF official does not want to undergo the same experience when he leaves his job "quiet soon, and for personal reasons".

The IMF mission apparently is demanding the "concrete, immediate and detailed" instrumentation by the Argentine central government of all the commitments agreed with the impoverished provinces to drastically reduce their deficits by 60%.

Furthermore IMF wants a contraction of the whole financial system, including the two main government run banks, Nación and Provincia de Buenos Aires, in accordance with market conditions, and vetoing four articles of the eliminated "economic subversion" bill that legislators nevertheless included in the Argentine Penal Code, and are seen as a threat pending over businessmen and bankers.

However the Duhalde administration is arguing that it has complied with all the original IMF demands and it's "only natural that negotiations become tougher as we approach an understanding".

Argentina is desperately requesting financial aid from the IMF, basically 9,5 billion US dollars, which remain frozen since last December, from a 22 billion original rescue program.