MercoPress. South Atlantic News Agency

Ms. Krueger and Argentina in collision course

International Monetary Fund First Deputy Managing Director Anne Krueger is defending the position of “speculating creditors” who are pressing Argentina for an improvement in the restructuring debt plan, claimed Argentine cabinet Chief Alberto Fernández.

Ms. Krueger "exhibits a position very much in line with those creditors of Argentina who are strongly speculative creditors", added Mr. Fernández in direct response to Ms. Krueger's recent statement in Davos, Switzerland, questioning Argentina's economic progress and demanding the urgent beginning of negotiations between Argentina and creditors for the restructuring of 88 billion US dollars in defaulted debt.

"The urgency must come from Ms. Krueger, not from us. Argentina is negotiating, but as in all negotiation time is needed, and that is the reasonable time to be expected".

Representatives from the many thousands of Argentina's creditors in United States, Italy, Japan and Germany have rejected the Argentine plan to pay 25 US cents for every US dollar of defaulted debt. Argentine sovereign bond holders are also waiting for a face to face negotiation, instead of having to talk with Finance Secretary Guillermo Nielsen who "only talks about the performance of the Argentine economy".

Last September Argentina and the IMF reached a three years 12,5 billion US dollars agreement by which the multilateral organization does not offer fresh funds but renews existing credits. As long as Argentina keeps to certain agreed targets.

Argentina's strong recovery with an unexpected 8% expansion in 2003 has seen some of those targets overshot.

With this new scenario the IMF is pressing Argentina for a better deal with creditors.

"Many have genuine doubts as to what Argentina has achieved has been sufficient", said Ms. Krueger in Davos.

Ms. Krueger was referring to next Wednesday when the IMF Directory will be considering the first review of the Argentina-IMF accord and some of the doubts refer to pending "structural reforms" and the negotiation with holders of defaulted Argentine sovereign bonds.

"The agreement they reach with their creditors is something between them and the Argentine government. We don't have an active position in the issue, only that what ever is committed must be consistent with the macroeconomic framework agreed", argued Ms. Krueger.

"There must be negotiations, fair and in good faith, that has been clearly established in the letter of intent signed by Argentina", underlined the IMF high official. "I believe we have to be very careful and not be tempted into this type of pressure", retorted Mr. Fernández from Buenos Aires.

If the IMF finally approves the review, Argentina will be receiving 330 million US dollars, which would be a crucially positive sign in the current collision course.