MercoPress. South Atlantic News Agency

“Give Argentina a break” says US to IMF

Argentina received crucial political support from the United States in its current negotiations with the IMF, less than 24 hours from the deadline for the repayment of 2,9 billion US dollars that could again bring the spectre of default unless an agreement is reached by mid day tomorrow.

"It's time for the IMF to be more flexible and reasonable with Argentina", said Monday morning in Washington Roger Noriega, Assistant Secretary of State, the top US official for Latinamerican affairs.

"The US believes the conditions for reaching an agreement with the IMF are favourable and that Argentina enjoys terrific political support from the US and the G 8 in general", added Mr. Noriega.

"Argentine authorities are well aware of the degree of support they have received", pointed out Mr. Noriega who last August visited Buenos Aires.

The frantic negotiations involve a three year pact that will allow Argentina repay the interest on 13 billion US dollars in IMF credits actually rescheduling capital. However IMF is insisting private banks must be compensated for the 2001/2002 collapse of the Argentine economy and public utility rates, mostly frozen since then, must be allowed to increase.

Mr. Noriega said that the US government believes that Argentina and IMF positions over the weekend "have drawn much closer" and an agreement is almost there.

"The US believes IMF must show more flexibility to help Argentina put its house in order" stressed Mr. Noriega during a conference on Latinamerica in the Centre for International and Strategic Studies.

The IMF delegation currently discussing the accord in Buenos Aires had originally planned to leave last Friday but have stayed on until a final understanding is reached.

In Buenos Aires Minister of Interior Aníbal Fernández said Argentina was willing to reach an accord with the IMF, but "will not accept conditions that imperil the incipient Argentine economic recovery".

Meantime it was reported that this morning Central Bank president Alfonso Pat-Gray met with other government officials. If no agreement is reached in the coming 24 hours, Argentina either repays the 2,9 billion US dollars credit with international reserves, or will automatically default.

However much will also depend of what happens this Monday in Washington where Argentine Ambassador José Octavio Bordón was scheduled to meet President George Bush at the White House for the official credentials presentation ceremony.

According to the Argentine press Ambassador Bordón who will be delivering President Bush a personal letter from President Kirchner, has been in permanent contact with Economy Minister Roberto Lavagna and Foreign Affairs Minister Rafael Bielsa.

"Negotiations with IMF are going well and I trust they will end in the same spirit we've been working so far", said Mr. Bordón adding that he wouldn't be surprised if President Kirchner and IMF Director General Horst Köhler talked on the phone.

"The US government has played and will continue to play an important role in the talks leading to an agreement with the IMF. However they are negotiations of a very important complexity", pointed out Ambassador Bordón.

Repeating the official Argentine line Mr. Bordón underlined, "it's not proper to sign agreements that you can't honour".