Washington's decision to vote against loans for Argentina from multilateral development banks “will not affect the country's funding for 2012”, an Argentine government source said on Wednesday.
Last week, Marisa Lago, an assistant secretary at the US Treasury Department, told Congress Washington had voted against a 230 million dollars loan to Argentina from the Inter-American Development Bank to send a message that the country must live up to its international obligations.
She said Washington would continue voting against such loans at the IDB and at the World Bank.
”The impact (the US strategy) could potentially have on voting in these organizations will not be felt in 2012 because all the loans planned for 2012 have already been approved by the boards of directors an Argentine government source told reporters, adding the loans for next year totalled some 2.3 billion dollars.
The US move seems to have been prompted by demands from Azurix Corp, which says Argentina refuses to honour a ruling by the World Bank's ICSID arbitration tribunal to compensate it for prematurely scrapping a 30-year water concession during the country's crippling 2001-02 economic crisis. ICSID stands for International Centre for Settlement of Investment Disputes.
In 2002, Argentina devalued its peso after 10 years of a one-to-one peg to the dollar and it also put public utility tariffs into pesos, angering private companies.
Argentina that year also defaulted that year on some 100 billion dollars in sovereign debt.
So-called holdout creditors who rejected Argentina's swaps for defaulted debt in 2005 and 2010 and whose US court judgments have been skirted by Argentina have also lobbied the US government to step up pressure on the country.
Argentina’s Deputy Economy minister Roberto Feletti argues they are ‘vulture funds’.
Lago told the US House of Representatives' Financial Services Committee last week that Washington was concerned about Argentina's failure to honour its ICSID awards and its unwillingness to engage with its creditors.
Referring to a Sept. 14 IADB meeting, she said: We voted no to send a message of our concerns about this, we will continue to vote no for loans to Argentina in the multilateral development banks and we will look forward to engaging with other donors who may share our concern.
We value ICSID, we believe that countries need to live up to their international obligations, Lago said.
Azurix's lawyers also petitioned the US government to withhold support for Argentina's request to restructure between 8 and 9 billion dollars in defaulted debt owed to the Paris Club of wealthy creditor nations.
Feletti said that the US position had a neutral impact on loan disbursements from the IADB.
The facts show that at the IADB, the credits for Argentina were approved despite a negative vote from the United States -- one on September 14th and another this week Feletti said. The impact is neutral; there is no restriction on the loans that Argentina has solicited from the IADB”.