MercoPress. South Atlantic News Agency

Argentina closer to an agreement on Paris Club debt

Argentina is considering submitting a report on its economic program to the International Monetary Fund to help unblock negotiations on its 6.3 billion US dollars debt with the Paris Club, a government official said yesterday.

"This will be part of discussions in the coming days and will also be discussed in the IMF's assembly," a government official said on condition of anonymity, referring to the IMF fall meetings in Washington in late October. Paris Club rules require a country to have an IMF-supervised economic program before it can begin to renegotiate its Paris Club debt, on which Argentina defaulted during the 2001-02 crisis. "IMF-supervised" does not necessarily mean a program bound, linked or conditioned, which is the stalling point for the President Kirchner administration. Argentina, unhappy with conditions IMF programs impose on countries, paid off its entire IMF debt last year and President Nestor Kirchner has said there's "no way in hell" he would agree to another accord. But Argentine government sources said Dominique Strauss-Kahn, who will take the reins of the IMF as managing director in November, (and was supported by Argentina) suggested the idea as a way to jump-start stalled Paris Club talks. Strauss-Kahn also told Argentine officials during a visit to Buenos Aires last month that a new credit facility for emerging economies being designed by the IMF could perhaps be used by Argentina to pay off its debt, the government official said, adding this was not part of Argentina's plans for now. Local media interpreted a top US diplomat's comments last Friday as meaning Washington would back a soft accord between Argentina and the IMF, as a pre-condition for talks with the Paris Club of 19 creditor nations.