MercoPress. South Atlantic News Agency

Paris Club prepared for talks with Argentina over debt repayment

Kicillof was recently in Paris to resume negotiations

The Paris Club is open to talks with Argentina on repaying its debt, the group of creditor nations said on Wednesday, moving closer towards launching formal negotiations with Buenos Aires.

 Eager to settle disputes with its creditors, Argentina outlined its conditions for repaying the roughly 9.5 billion dollars in debt it owes Paris Club members last month.

Paris Club Secretary General Clotilde L'Angevin said that its members had had “preliminary discussions” on the offer from Buenos Aires, which was their first official contact in years.

“They are open to continue the dialogue with Argentina,” L'Angevin was quoted by Reuters, adding that Paris Club members wanted clarification from Buenos Aires on some questions.

The government of President Cristina Fernandez has insisted that any negotiation must not include the IMF, as apparently the Paris Club demands, given its multilateral condition and auditing of all world economies.

With dollar funding scarce and international reserves dwindling, Argentina devalued its currency last month, putting Latin America's third-largest economy at the centre of a global sell-off in emerging market assets.

The revival of long-stalled talks between Argentina and the Paris Club marks a small step towards opening formal negotiations to decide how to handle the country's outstanding debt with the group, a remnant of its massive 2002 default.

Argentina wants a breakthrough deal because it needs to open up new sources of international funding after being shut out of capital markets since its default.

Economy minister Axel Kicillof recently travelled to Paris with several advisors to resume negotiations, and on his return to Buenos Aires said it was going to be “a long process”.

The Paris Club is an informal group of financial officials from 19 of some of the world's biggest economies, which provides financial services such as, debt restructuring, debt relief, and debt cancellation to indebted countries and their creditors. Debtors are often recommended by the IMF after alternative solutions have failed.

It meets every six weeks at the French Ministry of Economy and Finance in Paris. It is chaired by a senior official of the French Treasury, currently the Director General of the Treasury, Ramon Fernandez. The club grew out of crisis talks held in Paris in 1956 between Argentina and its various creditors.