MercoPress. South Atlantic News Agency

We won't pay IMF if accord revisions not approved

Argentine President Nestor Kirchner on Wednesday said that the government would not use its reserves to make its next instalment of payments due to the IMF unless the international lending body first approves the revision of the accord reached last September with Buenos Aires.

Kirchner said Wednesday afternoon that "if no prior announcement by the Fund's board of the approval" is made; Argentina will not dip into its monetary reserves to pay the $3.1 billion bill coming due to the International Monetary Fund on March 9.

"If Mr. (Horst) Koeher calls us, like with the previous revision (of the document), and the measures are approved, then there will be no problem," Kirchner said, referring to the IMF director.

In principle, Argentina would like to comply with the guidelines of the three-year program agreed with the IMF last September, but there has been resistance within the IMF board to approving the second revision of the document due to the lack of progress in talks between Buenos Aires and private creditors.

If the IMF does not approve the revisions and considers the accord to have been cancelled, Argentina would no longer be able to count on the organization's commitment to reimburse each payment the government makes.

If the Kirchner government decides not to adhere to its March 9 payment commitment, it would have only a month before it would be declared officially in default.

Argentina must arrive at an accord with its private creditors to restructure some $88 billion in its bond debt, which has been in default since the end of 2001.

The talks on the matter have gotten bogged down because while Argentina wants a 75 percent reduction in the debt, the bondholders say they will not accept debt discounts of more than 40 or 50 percent.

Giving a positive signal to observers abroad, the government on Tuesday designated three international banks to help with the restructuring of the debt to private creditors.