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 IMF Supports Argentina on Agreement

   


By: The Associated Press
The New York Times, February 28, 2002

 

 

Washington -- The International Monetary Fund expressed support on Thursday for a revenue sharing agreement Argentina has reached with its provinces and said it was likely an IMF negotiating team would be sent to Buenos Aires next week.

IMF spokesman Thomas Dawson said that the 183-nation lending agency had received a text of the agreement that was reached late Wednesday between Argentine President Eduardo Duhalde and governors of the country's provinces.

The accord, seen as crucial in dealing with Argentina's budget deficit, fixes the amount of money the provinces can receive from the central government at 56 percent of the total tax pool and commits the provincial governors to cutting their deficits by 60 percent this year.

Duhalde, in a signing ceremony in Buenos Aires, called the agreement an important first step to ``put Argentina back on its feet.''

In Washington, Dawson told reporters, ``Certainly an agreement with the provinces on a sustainable relationship is something to be welcomed.''

He said this agreement was one of a ``number of areas'' where progress was being made in discussions between IMF officials and the Argentine government on the proper approach to take to deal with the country's severe financial crisis.

``There is a lot of work to do but we are committed to work with the authorities as intensively as we and they can,'' Dawson said.

Duhalde has said that international support is crucial to his efforts to overcome the country's deep financial crisis. His government is reportedly seeking as much as $23 billion in new loans.

In December, the IMF cut off Argentina's access to an existing $22 billion loan program, contending that the country's current economic policies were not sustainable.

That decision forced the country to default on its massive $141 billion foreign debt and triggered an economic crisis that led to violent street protests.

Dawson said that the IMF negotiating team will be led by Anoop Singh, who was named on Monday to a newly created IMF post of director of special operations.

IMF Managing Director Horst Koehler said that he created the new post to have a top IMF official coordinate work among various IMF departments with countries facing ``critical situations.''


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