MercoPress. South Atlantic News Agency

G7 urges Argentina to re-negotiate debt

“Following the debt exchange, Argentina needs to address the remaining defaulted debt, in line with the lending-into-arrears policy of the IMF, and undertake structural reforms to ensure sustainable growth,” the G7 said in a statement signed by its financial officials after a meeting in Washington.

The G7 comprises the US, Japan, Germany, France, Britain, Italy and Canada.

About 76 percent of creditors accepted Kirchner's offer last February but about 24 percent of bondholders refused the debt exchange deal, which shaved up to 70 percent off investor holdings.

Meanwhile, the Argentine government for the nth time yesterday reaffirmed that it won't engage in new talks with the holdouts.

"As long as Kirchner is President there is no possibility whatsoever of reopening the swap," Cabinet Chief Alberto Fernández said in Buenos Aires, echoing words of Kirchner himself, who made similar comments during a five-day visit to Germany that was ending yesterday. "We have made an offer that has been accepted by over 76 percent of the creditors. There is no possibility of reopening that," Fernández said.

Kirchner's manoeuvre reduced Argentina's debt from 191 to 125 billion dollars.

A crippling five-year recession that ended in 2002 forced Argentina to declare in late 2001 the world's largest-ever debt default, amid deadly riots linked to the economic crisis.

The economy is now growing soundly but Kirchner argued that the country could not pay more to the creditors, alleging that otherwise it would risk a "genocide." About 40 percent of the Argentine population are poor.

The International Monetary Fund and the World Bank are also pressing Argentina to negotiate with the holdouts.