IMF Hardens Position, Argentina Does Not Pay Up

Argentine Government announced on Thursday a default on debt payments to the World Bank for up to $ 805 millions.

The South American country only wired a partial payment of $ 79.2 million on a scheduled payment that had been due on October 15. The announcement came by the time the National Minister of Economy, Roberto Lavagna, held a crucial meeting with IMF Vice-Director Anne Krueger. In despite of the default, the IMF, in a statement confirmed advances in the negotiations after US Treasury insisted on the necessity of a quick agreement between both parties.

"Argentina does not want fresh funds" Lavagna said in Washington. "We cannot afford next debt expirations and therefore ask the IMF for a Roll Over on them".

However, the Argentine decision to postpone debt payments with the World Bank due to the constant weakening of its International Reserves was not welcomed by the IMF. The organization insisted on a full political support to the agreement. They want to be sure that the Parliament, Governors and presidential candidates will support a future program with Argentina.

Notwithstanding, many opposition groups and an important sector of the ruling Peronist party do not support Government negotiations with the International Monetary Fund. Therefore, President Duhalde will have to struggle hard.

Under World Bank policies, no new loans can be considered when a country is 30 days late on payments. In another 30 days, existing loans will also be frozen for Argentina.

Hernan Etchaleco PRAVDA.Ru Argentina

Photo: Minister of Economy Roberto Lavagna.