MercoPress. South Atlantic News Agency

Argentina before the IMF Executive Board.

The International Monetary Fund, IMF, Executive Board is scheduled to formally approve this Monday the second review of the three year stand by program with Argentina, which will open the way for a reimbursement of 3,1 billion US dollars to Argentina and other pending credits from the World Bank and the Interamerican Development Bank.

Although interim Managing Director Anne Krueger recommended the approval of the review a strong political element will be involved in the voting since not all countries represented in the Board particularly the all powerful G-7 (Group of most industrialized countries), are unanimous about how to proceed.

When the first review last January Britain, Japan and Italy abstained arguing that Argentina was "not negotiating constructively or in good faith" with private creditors. However, this Monday apparently Italy will support Argentina (with Britain and Japan again abstaining), together with United States, Germany, France, Spain, Canada ensuring a comfortable approval.

"Argentina will have more votes than last time", anticipated Argentine Cabinet Chief Alberto Fernández. Argentina and IMF sustained tense negotiations for days until a few hours before the March 9 deadline, when president Nestor Kirchner ordered the repayment of 3,1 billion US dollars. Ms. Krueger promised to recommend the approval of the second review and this week Argentina will be making further repayments.

Argentina also agreed to a timetable of negotiations with private creditors and named the banks syndicate that will be responsible for the bonds exchange.

This Monday's recommendation letter to the IMF Executive Board underlines the "considerable progress in the implementation of the (Argentine) economic program", while increasing the economy's annual growth estimate from 4,5 to 5,5% with "one digit" inflation.

The letter further on says that the disciplined implementation of fiscal and monetary policies has contributed to "strengthen confidence, reduce inflation, lower interest rates and recover private investment".

"All quantitive targets to December 2003 have been amply achieved particularly growing fiscal revenue, which together with a strong control of expenditure have resulted in larger savings than programmed".

The Argentine government is also committed to reaching a new formal agreement with provincial governments regarding the sharing of tax revenue that must be drafted into a bill. Furthermore the review of the controversial contracts with privatized public utilities, an ongoing dispute since rates were frozen in December 2001, should be completed by June 2004.