MercoPress. South Atlantic News Agency

US about turn: now it supports loans to Argentina in multilateral credit organizations

Cristina Fernandez and Obama, improving relations?

The Inter-American Development Bank (IDB) announced on Wednesday the unanimous approval of a 400 million dollar credit to Argentina in order to improve the infrastructure of the country’s poor neighbourhoods.

The big news however is that the United States contrary to other recent loans, voted in favour of granting the credit that will begin to be repaid in 2016 and over a 25-year period. The loan is complemented by an additional 45 million dollars provided by the local Government, the IDB announced.

US policy until this week had been to vote against loans for Argentina until the country reached an agreement with pending defaulted bond holders from the US, complied with compensation for two Texas companies that won their cases in an international tribunal for investment disputes and concluded negotiations with the Club of Paris of sovereign creditors.

“70,000 families will be benefited by infrastructure works that will provide the population with drinking water, a sewage system, gas, lighting and public spaces for leisure plus regulating land possession in the precarious settlements” the Federal Planning Ministry said in a release.

“This is a small technical issue, and in the framework of our legal system we don’t have much flexibility. If my country does not follow these rules, then the instructions we receive (from Congress), if we want to support the IADB, is that we can’t vote in favour of those loans”, President Obama told his Argentine counterpart during a recent meeting in France.

The negative vote from the US in the IADB does not reflect the desire to work with Argentina, but rather “with the limited space our administration has and we are working with Argentina to see how we can solve the situation”, Obama said on the occasion.

The US started to vote against granting loans to Argentina following on the threats of a group of members from the US House of Representatives to block the IADB capital increase and of other multilateral credit organizations, if loans were not denied to Argentina that was reluctant to compensate the two US companies.