MercoPress. South Atlantic News Agency

France will support Argentina in IMF vote

French Foreign Affairs minister Dominique de Villepin currently visiting South America assured Argentine president Nestor Kirchner that France will support Argentina in the IMF Board meeting when the second review of fiscal targets next March, according to Cabinet Chief Alberto Fernández.

Mr. de Villepin in his first leg of the Latinamerican tour that includes Chile and Brazil ratified French companies decision to continue investing in Argentina.

Nonetheless he pointed out "what eventually might happen with one of those companies does not mean a constant conduct pattern from the rest", in direct reference to Thales Spectrum that was in control of Argentina's radio spectrum but has seen its contract rescinded following "non fulfilment of the concession's contract conditions".

President Kirchner together with Foreign Affairs minister Rafael Bielsa and Economy Minister Roberto Lavagna spent over an hour with Mr. de Villepin in Casa Rosada (Government House).

"We're most satisfied with the meeting. Mr. de Villepin transmitted President Chirac and his government's support for the current Argentine process and satisfaction with the performance of the Argentine economy", indicated Mr. Fernández.

The Argentine official underlined that France will back Argentina when the IMF Board reviews the country's performance next March of the IMF-Argentina three years agreement signed last September. Mr. Fernandez recalled that Argentina in its first review overshot the targets and conditions agreed with the IMF.

During the meeting apparently the sensitive issue of an increase in the frozen (since December 2001) public utility rates demanded by French companies in Argentina (water and energy) was not addressed, nor the irritating ongoing negotiations between Argentine defaulted sovereign bond holders and the Argentine government that has proposed a 75% face value cut.

According to Argentine press reports President Kirchner during his recent visit to Spain told Spanish investors that public utilities rates (mostly privatized and belonging to European corporations) "will only be increased once the Argentine GDP has recovered and according to corporations investments".

Press reports also revealed that a new regulatory framework is being drafted and will soon be sent to Congress.

"Public utilities rates will be increased once the Argentine economy expands 16% over its lowest during the worst moment of the recent 2001/2002 meltdown".