MercoPress. South Atlantic News Agency

IMF-Argentina third review “delayed”

The International Monetary Fund, IMF, said Thursday that the third review of the 13 billion US dollar agreement with Argentina is “delayed” but not suspended since both sides continue negotiations in the framework of very cordial relations.

"A delay in the review does not mean a delay in dialogue", said IMF spokesperson Thomas Dawson during a regular press briefing in Washington.

"Suspended is not the right word, either in legal sense or in describing what the nature of our relationship is".

Earlier this month Argentine Economy Minister Roberto Lavagna announced that Argentina had decided to suspend negotiations with the IMF until the end of the year to concentrate in the restructuring of the country's defaulted debt estimated in 100 billion US dollars.

The decision was announced by the Argentine government following a delay by the IMF in approving the third review which was initially scheduled for July.

The suspension of the agreement would mean Argentina ceases to receive disbursements from the IMF when the country only has access to multilateral credit from the World Bank and the Interamerican Development Bank until an agreement is reached with private defaulted bond holders.

However Mr. Dawson's press statements indicate that discussions with the IMF continue.

The third review was delayed because in spite of excellent economic indicators, Argentina has failed to implement structural reforms such as revenue sharing between the federal and provincial governments and renegotiation of contracts with public utilities companies most of them belonging to European investors.

IMF Managing Director Rodrigo Rato is expected next Tuesday in Buenos Aires where he will be meeting President Nestor Kirchner, Minister Roberto Lavagna and other officials.

This is Mr. Rato's first visit to South America, which will also include Uruguay, Chile and Brazil, since becoming head of the IMF.