Buenos Aires hoping IMF will relent on aid package

With Brazil the recipient of a US$30 billion aid package from the International Monetary Fund (IMF), leaders in Argentina are hoping they can speed up negotiations to get money of their own.

Foreign Minister Carlos Ruck-auf, speaking with reporters on Thursday, said the IMF's accord on a 15-month standby loan for Brazil was a "logical" step because of currency and economic volatility in that country.

Argentina, the second-biggest economy in South America after Brazil, wants its own bailout package in the coming weeks.

Ruckauf said an emergency loan of US$1.5 billion to Uruguay this week by the US was an appropriate measure given the severity of a banking crisis now lashing Argentine's other neighbor.

As for the Brazilian aid, he said the IMF package's scope and size recalled some US$20 billion in emergency credits given Argentina's last popularly elected president, Fernando de la Rua, during the deepening economic crisis in Argentina. De la Rua was forced to resign amid street riots in December as Argentina's economy unraveled.

For his part, Economy Minister Roberto Lavagna said of talks with visiting US Treasury Secretary Paul O'Neill that he hoped to send a letter of intent to the IMF next week. O'Neill was in Argentina this week on a four-day trip that began in Brazil and Uruguay.

He said that would help spur negotiations, which he hoped could be concluded by the end of August or early September. The IMF shut off billions of dollars in credits in December as Argentina's economic crisis worsened, but negotiations for a resumption of credit have been continuing

"In three or four weeks, we should have some notable advances in the negotiation," Lavagna said.

Skeptics still speculated on whether the IMF would ultimately be willing to advance a sizable bailout fund to a country whose default on its US$141 billion public debt is the largest of any sovereign nation on record.

For months, IMF officials have exhorted Argentina to come up with a "sustainable" budget-cutting plan.