MercoPress. South Atlantic News Agency

President Kirchner's two big NO.

Argentine president Nestor Kirchner categorically rejected two requests from visiting International Monetary Fund Managing Director Rodrigo de Rato which supposedly would help resume discussions in the framework of the IMF-Argentina stand-by arrangement, according to the Buenos Aires press.

"Don't you even dream" that the Argentine 2005 budget will have a surplus target above the current 3%, apparently was Mr. Kirchner's reply to a suggestion from Mr. Rato. IMF is pushing for a 4% surplus next year and 5% in 2006 but Argentine officials indicate this could endanger the current recovery.

During the brief Tuesday meeting of the IMF delegation with Argentine Economy and Central Bank officials Finance Minister Roberto Lavagna revealed that the 2005 budget was "almost complete" and included a primary surplus of 3,6%.

"We look forward to a commensurately strong budget framework for 2005 and the medium term", was the reply from Mr. Rato in the official release distributed before leaving for Montevideo.

A second President Kirchner refusal followed a suggestion from Mr. Rato to better the restructuring terms for the approximately 100 billion US dollars in defaulted sovereign bonds which Argentina has offered to exchange for new issues totalling less than 40 billion US dollars.

In the final release Mr. Rato points out that the completion of a comprehensive and sustainable restructuring of Argentina's sovereign debt to private creditors is a "particularly important", "indispensable" element.

The strong standing of Mr. Rato surprised the Kirchner administration that unilaterally delayed the consideration of the third review of the Stand-by arrangement with IMF and was expecting to reimburse for the rest of the year, 1,4 billion US dollars instead of 2,4 billion. "We'll look at the request (automatic refinancing of a billion US dollars)", Mr. Rato told the press when he was asked about the issue. "We'll consider it in the framework of the economic policies decisions of the coming days and of what productive relations between the IMF and the Argentine government should be", was Mr. Rato's reply to Argentine officials. The last paragraph of the IMF release before leaving Buenos Aires for Montevideo is most illustrative of the atmosphere.

Meanwhile in Madrid an internet agency, "El Confidencial" revealed that Mr. Rato's visit was "more of a compromise" since leaving Argentina out of a Mercosur tour (Brazil, Chile, and Uruguay) would have been interpreted as an "insult". That is why Mr. Rato went overnight to Montevideo and was only nine hours in Buenos Aires.

Mr. Rato's brief but intense visit to Buenos Aires was accompanied by violent street protests and storming of the Economy Ministry building, (where the IMF delegation was holding talks), Government House (Casa Rosada) and even the Sheraton Hotel which was the temporary IMF HQ.

But the "soft glove" attitude of the police with protestors, in spite of over one hundred arrests gives an idea of the still fragile recovery and delicate social situation Argentina is still suffering.

Could this be interpreted as a display for foreign visitors? asks a Buenos Aires newspaper.