MercoPress. South Atlantic News Agency

Argentina announces formal negotiations with the Club of Paris

Minister Amado Boudou will be meeting his French counterpart Christine Lagarde

Argentina’s Economy minister Amado Boudou meets this week with its French peer Christine Lagarde for the resumption of negotiations with the Club of Paris. The meeting will take place previous to the G-20 presidential summit in Pittsburgh.

Boudou speaking with the press in Buenos Aires said he had received an invitation from the French minister to advance negotiations with the Club of Paris, which is made up of 19 developed countries, including France, and with which Argentina has a debt of 7 billion US dollars.

The Argentine minister said the meeting with Lagarde is scheduled for next Thursday and revealed he had already established contacts with the US, Germany and Japan, which he described as potential “allies” in the coming discussions to reach an agreement.

Last year Argentina announced its intention of reaching an agreement with the Club of Paris regarding back payments. According to Argentina the debt amounts to 6.7 billion US dollars but creditors insist in 7.5 billion.

In January 2006 Argentina cancelled all its pending debt with the IMF, 9.5 billion US dollars, for which it appealed to the Central Bank international reserves.

However Boudou said that with the Club of Paris, “paying cash is not an option”.

Argentina’s hard currency reserves last Friday stood at 45.2 billion US dollars.

He said that the two sides were working to determine the exact amount of the debt, and “it would be most positive if we could reach an agreement before the end of the year”.

“We’re in a favourable context to reach an agreement”, said the minister, adding that “central countries need to export and we need direct investments”.

Nevertheless the stumbling block could be the monitoring of Argentine government accounts by the IMF, as established by the Club of Paris, but which Argentina rejects point blank.

“We are hopeful we can reach an agreement on this issue”, said Boudou.

Six countries concentrate 87% of Argentina’s debt to the Club of Paris, Germany, Japan, Holland, Italy, Spain and United States.