MercoPress. South Atlantic News Agency

Decisive week for Kirchner and bondholders

Argentine president Nestor Kirchner returned this Monday to his office in Casa Rosada after suffering a strong strain of influenza that kept him away for several days including his participation in the European Union-Latinamerican summit in Mexico.

Two decisive issues are on his desk: the final offer to defaulted private bondholders amounting to 82 billion US dollars and a domestic wrangle with Buenos Aires province governor Felipe Solá who is claiming federal funds from the central government.

The defaulted bondholders issue has haunted President Kirchner's administration since taking office a year ago and dates back to December 2001 when Argentina defaulted.

Argentina however has honoured interest and capital of multilateral organizations credit and bonds issued following the default, all of which amounts to over 84 billion US dollars.

Because of the defaulted bonds issue Argentina has been under growing pressure from countries whose nationals are creditors and international financial organizations such as the International Monetary Fund.

Precisely Governor Solá is refusing to sign a new federal taxes co-participation system, demanded by the IMF to straighten provincial budgets, unless the central government refunds Buenos Aires province several hundred million US dollars claimed from a previous agreement.

President Kirchner and Governor Solá have also been at loggerheads over security issues in the province of Buenos Aires, particularly metropolitan Buenos Aires, which has been suffering from the worst spate of crime and police corruption in decades.

Mr. Kirchner was also absent for several days, and urgently hospitalized", during April after suffering bleeding from a duodenal haemorrhage.