Jim, per our Argentina default discussion from the past, things are heating up, again.
And now that Brazil has elected a questionable ultra far left president, things are going to get dicey down south...
When will he default on $260 billion of debt?
news.bbc.co.uk
Remember that saying neither a borrower nor lender be?
How many battle fronts does the Pentagon say we can fight?
Yeah, right...
Argentina races to get IMF deal before new default
BUENOS AIRES/WASHINGTON, Oct 28 (Reuters) - Argentine officials arrived in Washington on Monday to try to break the latest impasse in aid talks with the IMF as a potentially disastrous new debt default loomed less than two weeks away.
Argentina's government pressed the International Monetary Fund to relax its demands for utility rate hikes, budget cuts and a bank bailout, saying such measures could upset its recession-weary population. The IMF insists the policies are mandatory.
Economy Minister Roberto Lavagna was ready to join the lower-level team in Washington if necessary by mid-week to try to revive negotiations which appear bogged down again after making swift progress over the last month.
"The final details of the deal will undoubtedly be discussed this week. That is why the Argentine mission has traveled to Washington," Cabinet Chief Alfredo Atanasof told reporters.
The two sides have haggled for months over terms for aid as Argentina spins deeper into a four-year slump worse than the 1930's U.S. Great Depression. Half of Argentina's 36 million people are now living in poverty and many from the fallen middle class have emigrated.
Thousands of acres of the world's best farmland are unplanted because broke banks have stopped lending. Grocery stores have begun handing out special green trash bags for citizens to sort out paper for the hordes of unemployed who roam streets at night searching for scraps to recycle.
Argentina says it must get IMF cash by Nov. 9 to avoid missing payment on debt it owes multilateral organizations like the World Bank, and has warned it will not use its depleted Central Bank reserves.
Following January's massive default on debt held by private bondholders, such a stoppage would cut off Argentina's only source of external financing and bar billions of dollars in potential aid for social programs.
ENOUGH CONSENSUS?
Even if Lavagna does come to Washington, sources at the IMF said it would not signal an imminent deal, but could suggest just the opposite: that talks have stagnated to the point his presence was necessary to break a stalemate.
"If Lavagna does come here, it will not be indicative of a mutual desire to seal a deal immediately," one IMF source said. A second IMF source said, "Issues still need to be worked out, the monetary anchor and other issues are still pending."
A best-case scenario for Argentina would likely involve the IMF rolling over around $15 billion in debt it owes multilateral lenders through the end of 2003.
Markets have climbed steadily over the last month as observers said they believed a deal was closer than ever. But skeptics caution that Argentine politicians and the IMF have often been unable to agree upon final details.
"The political consensus seems strong but these talks have come unraveled before," said Aldo Abram, an economist at Exante consultancy in Buenos Aires.
Argentina fears raising taxes or utility rates could disturb the relative economic stability it has enjoyed since June. Many inside and outside the government fear a repeat of early 2000, when an IMF-backed tax increase snuffed out an incipient recovery.
But the IMF has insisted upon the rate hikes it says are necessary to save mostly foreign-owned utility companies from bankruptcy. It also says a fiscal adjustment is needed to keep Argentina from sliding back into free-spending ways the lending agency blames for its decline. |
