MercoPress. South Atlantic News Agency

Kirchner meets Bush with the IMF in mind

Argentine president Nestor Kirchner who will be visiting Washington next Wednesday July 23 said he shares with President George Bush several goals: fighting corruption, drug traffic and terrorism. However he anticipated that he also wishes United States will support Argentina in its negotiations with the International Monetary Fund, IMF.

"In several ways we're fighting for the same: finishing corruption that has gobbled Argentina for so many years, drugs trade and terrorism. These are the main axis of the interview with President Bush", indicated Mr. Kirchner in a long interview published this Sunday in Buenos Aires.

"We hope President Bush will also help us reach an agreement with the IMF", added the Argentine president.

President Bush will be receiving his Argentine counterpart for the first time in the White House next Wednesday with an "open agenda", according to Argentine Foreign Affairs Minister Rafael Bielsa.

Mr. Bielsa said he believed the meeting will also include topics that interest United States such as Iraq, the Free Trade Association of the Americas as well as Argentina's policies regarding foreign debt and international trade.

Argentina is interested in increasing its bilateral trade with since during the first five months of the current year exports to the United States reached a modest 1,3 billion US dollars highly concentrated in oil and sub products.

Originally the Kirchner-Bush meeting was scheduled for next September but apparently the Argentine president's successful visit to Europe last week where he was promised support with the IMF by Britain, Germany, France, Spain and the European Commission, convinced Washington of advancing the date.

This decision has been particularly promising for the Kirchner administration that faces crucial negotiations with the IMF over a three years agreement that must be ready by September since the current provisional understanding that gave Argentina six months breathing space, expires August 31.

With Mr. Kirchner will be travelling Economy Minister Roberto Lavagna who has the difficult task of reaching an agreement with the IMF that includes a rescheduling of Argentina's foreign debt of 137 billion US dollars, with a significant maturing concentration in the last quarter of 2003.

US Treasury Under-Secretary John Taylor last week advanced that a quick understanding between Argentina and IMF is expected by the White House.

IMF Director of the Department of External Relations Thomas Dawson also quoted in Washington last week indicated that a several years' agreement with Argentina must be reached before September 9 and this is considered "a priority" by the IMF.

"It's more important to do it correctly than immediately, but at the same time it's still an urgent matter", stressed Mr. Dawson.

September 9 Argentina is expected to make effective a 3,2 billion US dollars re payment to the IMF. Argentina has debts pending with IMF totalling 13,5 billion US dollars.

An agreement with the IMF would grant Argentina a good bargaining position to normalize relations with sovereign bond holders who have been frozen from capital and interest payments since the country defaulted in December 2001.

IMF will be demanding Argentina involves in structural reforms and confidence building with foreign investors, meaning greater transparency and legal respect for contracts.

This weekend Argentina's Finance Secretary Guillermo Nielsen left for a long tour that includes Tokyo, Frankfurt, Rome, New York and Miami where he expects to have discussions with Argentine bond holders. An estimated 700,000 Argentine bond holders, representing the equivalent of 76 billion US dollars have been waiting for a solution to the December 2001 default. Some less patient have already demanded the Argentine government in court.

Argentina is planning to make an official proposal to bond holders during the annual IMF-World Bank assembly to be held next September 23 in Dubai.