Argentina approaching deadline for halting World Bank payments

["Fred Feldman" <ffeldman@xxxxxxxxxxxxxxxx>]

ARGENTINA-CRISIS
Countdown For Payment Cessation in Argentina

Buenos Aires, Oct 7 (PL) The Argentine government began the
week counting down until stopping World Bank (WB) payments.

Experts agree that this step, with the WB and its partner,
Inter-American Bank, could be avoided with implementation of
an agreement between authorities and the IMF (International
Monetary Fund).

Buenos Aires has been trying to reach such an agreement for
10 months, but both constant concessions -including removal
and modification of some national laws- have put an end to
IMF leadership"s conditions.

Up until now, the government has asserted it wouldn"t pay
its $830 million debt with the WB due this Wednesday, which
has November 9 as the default date.

Another $241 million also expires in November.

According to official data, Argentina has paid almost $4
billion in 2002 to international financial organizations,
which has increasingly affected its federal reserve.

However, some data from the Argentine administration gave
optimistic signals for an eventual and near agreement with
the IMF. Cabinet vice-president Eduardo Amadeo said, "we are
about to cut down differences".

Nevertheless, Amadeo affirmed it is time to stop the leaks
from the reserve. "This is not a whim ... we have $9.4
million in our reserve and $9.7 million expiring in May
2003", he stressed.

According to several local press analyses, in order to
finalize an agreement with IMF, a solution must be found to
IMF demands to make Argentina"s exchange market free
floating, establish new adjustments by increasing public
services taxes and restructuring the State bank.

Another point of contention is the duration of the contract.
The Argentine government wants a pact expiring in December
2003, while the IMF is demanding a shorter term to fix its
immediate position after the new administration is elected
in March.

OM/CCS


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