MercoPress. South Atlantic News Agency

“Strangled Argentina”

Argentina will seek this week in Washington the green light from the International Monetary Fund, IMF, for the rescheduling of its foreign debt maturing in the coming 18 months.

"It's a matter of breaking the financial restrictions imposed by maturing debt during the next six months and in 2003, so we can then liberate our home resources and begin attracting foreign funds", indicated Argentina's Economy Minister Roberto Lavagna in an interview with the Buenos Aires daily "La Nación".

Mr. Lavagna is scheduled to travel to Washington on Tuesday in an attempt to speed negotiations with the IMF and have access to fresh funds to honor commitments with international multilateral organizations such as the IMF and World Bank.

The immediate target is 5 billion US dollars, sufficient to repay credits maturing between next July 15th. and October.

However Mr. Lavagna admitted that Argentina and the IMF don't necessarily have the same opinion regarding monetary and fiscal policy, but "we will try to bring them closer", and was confident an agreement could be reached by mid July.

Mr. Lavagna recalled that IMF Director General Horst Kholer admitted last week that towards "mid July negotiations could have achieved something".

"We're seeking a realistic agreement with the IMF that helps us break the current financial strangling", added Mr. Lavagna.

Besides IMF officials, the Argentine delegation is scheduled to meet with the US Secretary of the Treasury Mr. Paul O'Neill and in New York with the country's main creditor banks.

Mr. Lavagna will be arriving after a week of not too favorable events in the country and the region: Central Bank president, Mario Blejer and the man most trusted by Argentina's creditors will be leaving at the end of June because of "internal" discrepancies; during the first quarter the country's GDP collapsed a record 16%; international reserves continue to erode and dropped below 10 billion mark; Argentina's contagion smacked head on in Uruguay and Brazil's political situation sent financial tremors to Chile and as far north as Mexico.

In Buenos Aires Argentine president Eduardo Duhalde has repeatedly forecasted that his administration will reach an agreement with the IMF by next July 14th.