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IMF Hopes Argentina Will Move Quickly
By:
Martin Crutsinger
Washington –– The International Monetary Fund said Tuesday it was encouraged with the new economic plan Argentina has developed, but an IMF official stressed the government will have to act "fast and decisively" to get control of the country's deepening economic crisis. IMF Deputy Managing Director Anne Krueger had a good conversation by telephone on Monday with new Economy Minister Roberto Lavagna, IMF chief spokesman Thomas Dawson said, terming the discussion a lengthy one covering "a great deal of territory." "We are encouraged that the 14-point plan signed by the president and provincial governors last week demonstrated broad political support for a comprehensive approach for dealing with Argentina's difficult situation," Dawson told reporters. He said that Lavagna had assured Krueger during their discussion of "his strong commitment in moving quickly to develop this plan into a consistent and sustainable program." Lavagna, who on Saturday became the country's sixth economy minister in just over a year, has focused his early efforts in trying to attract emergency loans to reinvigorate the stalled economy. The country's banks and currency trading resumed on Monday after a five-day emergency shutdown. The country has been seeking billions of dollars in new loans from the IMF, which cut off lending in December, the month the country's economic crisis exploded into street riots that toppled the government of then-President Fernando De la Rua. Dawson said that the IMF was ready to send technical teams back to Buenos Aires, possibly as early as this week, and was ready to follow up at an appropriate time with a negotiating team to strike a deal on new loans. Dawson did not say when the loan negotiating team might be sent but said it was still possible that could occur in May. He said it was crucial that the government move quickly to adopt further economic reform measures. The IMF has been demanding that Argentina adopt fiscal austerity measures including deep budget cuts by the country's 23 provincial governments. The IMF also wants the country to repeal several laws that the agency contends are a deterrent to private investment. Dawson said IMF officials realized that the economic situation in the country "does remain volatile. The risks are large and it is essential that the new team move fast and decisively to put in place the foundations for the program." Lavagna met with ambassadors of the Group of Seven rich industrial countries on Monday to make a personal appeal for their support for the new IMF loans. Treasury Secretary Paul O'Neill said late Tuesday that the United States has "been working quietly behind the scenes" and is encouraged by the signals over the past few days. He noted Argentina's economic plan includes target dates. "I'm hopeful," O'Neill told The Economic Club of Washington, a private business group. "We don't need another tender spot in the world economy." O'Neill said in a CNBC interview late Monday that the country's decision to allow the value of its currency, the peso, to continue to be set by market trading was a "good sign because it means they're not going to try to defend an indefensible pegged currency." Argentina was forced in December to halt payments on much of its $141 billion in foreign debt, in the largest government default in history. In an effort to get control of its economic situation, the government in February broke the one-to-one peg between its currency and the U.S. dollar. Since that time the peso has lost nearly 70 percent of its value and the country for a time was forced to shut the banking system to halt a massive drain of deposits. FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Action on Aging distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.
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