MercoPress. South Atlantic News Agency

Chirac promises full support for Argentina

As happened with Britain and Germany, and in Brussels, visiting Argentine president Nestor Kirchner was promised this Wednesday in Paris, support by his French counterpart President Jacques Chirac in Argentina's negotiations with the International Monetary Fund and with the recovery of the country's economy.

The Argentine delegation headed by President Kirchner and including Economy Minister Roberto Lavagna and Foreign Secretary Rafael Bielsa met with President Chirac and his ministers in the Elysium Palace for over an hour.

"President Chirac has decided to fully support Argentina with the several negotiation processes ahead and with the economic reactivation of the country's economy", said Mr. Kirchner following the meeting Wednesday evening.

At midday the Argentine delegation was hosted by Prime Minister Jean Pierre Raffarin and the Finance and Economy Minister Francis Mer who will be visiting Brazil and Argentina next week.

However Mr. Kirchner surprised MEDEF, the main French business and industry association by not going to an evening reception where he was expected to deliver a speech. The official excuse was that the Argentine president had a previous appointment with human rights groups who are particularly interested in meeting Mr. Kirchner following his recent suggestion in Buenos Aires that he "will not impede in anyway Justice from acting regarding military officers involved in human rights violations".

Economy Minister Lavagna was the main speaker at the MEDEF event where the issue of "frozen" public utility rates was brought up by several French companies with interests in Argentina.

Since the devaluation of the Argentine currency in January 2002 public utility rates have remained unchanged given "the volatile social situation" and "the need to modernize and get the Argentine economy rolling again". However foreign companies who invested heavily in the nineties in Argentina argue that with bankrupt companies it will be impossible to modernize or recover the economy.

France is the third largest investor in Argentina with over 12 billion US dollars, behind the United States and Spain.

At the end of the meeting MEDEF spokesperson said that although "surprised and let down by President Kirchner", Mr. Lavagna "was excellent" and his speech "perfect" for the occasion.

On his side Mr. Lavagna indicated that all conditions are ready for a middle term agreement between Argentina and the IMF, before September.

"I believe all conditions are ready and that's why an IMF mission is currently working in Buenos Aires. The short term agreement with the Duhalde administration has been complied and is over, and we're now working on a three years mid-term agreement"

In the last four months of 2003 Argentina must repay standing debts that amount to 6,167 billion US dollars including 3,2 billion to the IMF.

Mr. Lavagna has suggested that Argentina would like to announce that an agreement has been reached during the annual IMF assembly next September in Dubai. At the same time Argentina would be proposing a rescheduling program involving 52 billion US dollars in sovereign bonds held by non residents that have been "frozen" since January 2002 when the country defaulted and ceased all interest and capital payments.

President Kirchner begins this Thursday in Spain his last leg of the European visit that began in Great Britain as a host of Tony Blair in the Reformist Summit of Progressive Governance where he also met with German Chancellor Gerard Schroeder.

The second stop was Brussels to meet with European Commission president Romano Prodi and then to Paris with President Chirac.

In Madrid Mr. Kirchner will hold private talks with President José Aznar and King Juan Carlos.