MercoPress. South Atlantic News Agency

Argentina hopes to reach an agreement with the Paris Club this month

Economy minister Amado Boudou flies to Paris for the G20 meeting

Argentina’s Economy Minister Amado Boudou heads to France this week to participate in the G20 ministers meeting and will take advantage of the trip to further advance tentative negotiations to resolve the defaulted debt Argentina has with the Paris Club.

Boudou said last Friday that he and his Brazilian colleague, Guido Mantega, will hold “common positions” with regard to “defending the workings of the market and not restricting the commodities market”, an initiative sponsored by the host country France.

The Economy Minister added that “Argentina and Brazil will continue working toward reforming the international finance and monetary system,” adding that the fact that President Cristina Fernández de Kirchner is heading the G77 this year plus the China factor “gives an extra spice to this discussion” within the G20 agenda, which meets on February 18.

On the sidelines of G20, Boudou is scheduled to hold discussions with French Finance Minister Christine Lagarde, as well the head of the Paris Club, Ramón Fernández.

Argentine Finance Secretary Hernán Lorenzino was in Paris last week with the aim of continuing working on the conciliation of the total sum of debt and the interest Argentina has accumulated with the credit-lending group which is formed by 19 countries.

The outstanding debt with the Paris Club, which dates back to December 2001, is estimated at 6 billion US dollars, although late payments and accrued interest need to be added to that total.

The Argentine government tried to close the debt conciliation period in the third week of January, but due to a difference of opinion with regard to figures from both sides, a decision on a new total wasn’t reached.

In the past few days, Argentina had admitted to having a debt of around 9 billion USD with the Paris Club, but when asked about the matter, Boudou preferred not to comment.

It is possible that on this occasion an agreement of understanding may be signed this week, according to sources close to Boudou.

Once that step is reached, the negotiation stage comes next which would confirm the length of the repayment period.

The Argentine government’s initial plan was to cancel the debt within six years. However, according to the Paris Club, the repayment period should not exceed more than 18 months, with the first payment equivalent to half of the total debt, in order to avoid the requisite of an audit from the International Monetary Fund, which Argentina rejects point blank.