MercoPress. South Atlantic News Agency

G8 exam for new Argentine offer to bondholders.

The Group of seven highly industrialized countries plus Russia, G-8, which are holding a two days summit in Georgia, United States, have included in their agenda the latest Argentine offer to sovereign bondholders defaulted since December 2001.

Leaders of Germany, Canada, Britain, Japan, France, Italy, United States and Russia gathered in well protected Sea Island, have as top priorities of the meeting the evolution of the price of oil and interest rates, the Middle East conflict, the global economy and international trade, but will also have time to analyze the controversial structuring of Argentina's foreign debt, according to US sources.

"I have no doubts that the Argentine offer will be analyzed", indicated Richard McCormack, former US Under-Secretary of State who coordinated US participation in previous G7 summits.

Even when Argentina improved its offer to creditors last June 1, so far the IMF and the governments of the industrialized countries where most Argentine defaulted bondholders reside, haven't said a word.

G-8 country members have a significant majority of votes in the IMF and have lobbied strongly and patiently with Argentina in favour of bondholders.

This is particularly true of Germany, Italy and Japan many of whose retired citizens concentrate billions of US dollars in Argentine defaulted bonds. Besides, the IMF that also has a multilateral organizations debt restructuring agreement, at some point will have to decide if Argentina is effectively negotiating in "good faith" as was strongly suggested by several G-7 members.

"The fact of negotiating in good faith is most important for a continued support from the IMF, and the fact that Argentina has made more flexible its previous negotiating stand is obviously a positive step", pointed out Mr. McCormack.

In the G-7 Finance ministerial summit of last April in coincidence with the half year IMF and World Bank meeting, the final release specifically mentioned Argentina saying that progress has been made in the debt negotiating process with bondholders, "but more is required".