MercoPress. South Atlantic News Agency

“We won't cover up Wall Street errors”

“Some people on Wall Street would like to cover up the errors of the past, but we won't. Argentina will pay what it can,” said Argentine Economy Minister Roberto Lavagna in an interview with the Financial Times.

"Obviously a poor image abroad isn't helpful," stressed Mr Lavagna, "but we won't agree to any restructuring that sacrifices growth or precipitates another crisis down the road."

Mr. Lavagna strongly reiterated that Argentina has no plans to alter last September's proposal to restructure privately held defaulted bonds with a 75% face value cut, nor recognize past due interest.

At their meeting in Florida last week, Finance Ministers from the Group of Seven largest industrialised democracies urged Argentina to modify its proposal "to repay creditors 10 cents on the dollar in net present-value terms, which bondholders reject", according to the Financial Times.

Argentina is also facing intense pressure from the International Monetary Fund. Last month eight of 24 board members (including Britain, Japan and Italy) abstained from voting when the Fund approved the first review of Argentina's compliance with its $13.3bn loan program.

Mr. Lavagna also dismissed fears that Argentina risked international isolation for its defiant stance towards bondholders over the restructuring of almost 100 billion US dollars. "Investors who helped sink Argentina in debt while getting rich in the "marvellous '90s" are also responsible".

However Mr. Lavagna did admit that a final offer with some minor adjustments will be presented to creditors in two months time, although he refused to advance details. One of the options apparently would be to exchange current bonds for others linked to the country's economic performance.

Mr. Lavagna considered that naming a first line banks syndicate (Merrill Lynch, UBS and Barclays) to help the Argentine government in the debt renegotiation process is a clear signal of "good faith", as was requested by G-7 countries and the IMF.

But the Argentine minister continues to avoid the creditors with whom he plans to reach a deal. Actually the Argentine government refuses to recognize the Global Committee of Argentine Bondholders, formed last January, and has yet to reply to a February 24 meeting in New York.

"We told the IMF that GCAB can be facilitators of this process but not negotiators, until they demonstrate their legitimacy by having the bonds in their possession", Mr. Lavagna is quoted by the Financial Times.

Mr. Lavagna is scheduled to meet this Thursday in Buenos Aires with the IMF mission responsible for collecting information for the second review on the compliance of the three year IMF-Argentina agreement.

Another distinguished and influential visitor expected this week in Buenos Aires is German Economy Minister Hans Eichel. Germany voted favourably with the US the first compliance review of the Argentine stand-by IMF loan; Berlin the G-20 of industrialized and developing countries and IMF Director General Horst Koehler also happens to be German, and fluent in Spanish.

Meantime in New York US Judge Thomas Griesa authorized the seizure of 11 million US dollars deposited in the bank accounts of Correo Argentino, an Argentine private postal company which owes money to the Argentine government. Judge Griesa accepted the argument that since those assets will eventually become Argentine government property, defaulted sovereign bondholders are entitled to seize them.