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Buenos Aires hoping IMF will relent on aid package
DESPERATE:
Following IMF deals with Brazil and Uruguay, Argentina is hoping the fund will look kindly on it and bail it out of its economic problems
AP
, BUENOS AIRES, ARGENTINA
Saturday, Aug 10, 2002, Page 12
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 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 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.
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