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To: TobagoJack who wrote (22098)	8/5/2002 4:18:53 AM
From: elmatador	Read Replies (3) \| Respond to of 74559

O'Neil repares the damage: Uruguay wins $1.5bn US loan to support banks By Thomas Catán in Buenos Aires, Raymond Colitt in São Paulo and Edward Alden in Washington Published: August 4 2002 19:13 \| Last Updated: August 4 2002 19:13 Uruguay on Sunday received a short-term loan of up to $1.5bn from the US and imposed limited restrictions on bank withdrawals in an effort to avert a collapse of its once-vaunted financial system. The US bridge loan, which is intended to guarantee dollar-denominated short-term deposits in Uruguay against a run on the banks, came as the International Monetary Fund announced it would accelerate and increase its funding for Uruguay to help stabilise the country's financial system. The IMF, the Inter-American Development Bank and the World Bank pledged to advance $1.5bn to Uruguay immediately, and to add another $800m to bring total commitments to $3.8bn. The bridge loan, which coincided with the arrival of Paul O'Neill, US Treasury secretary, in the crisis-hit region, marks a deepening of US efforts to avert a further downturn in the region, and a shift away from the administration's hands-off approach news.ft.com

To: TobagoJack who wrote (22098)	8/5/2002 5:09:08 AM
From: elmatador	Read Replies (2) \| Respond to of 74559

Repairing the damage further: O'Neill Begins 4-Day Brazil Tour COMMENTS: The off the cuff gaffes of O'Neill were not affecting Brazil. He expected nothing to happen. Until the US companies established in Brazil told Washington that if Brazil sneezes the US catches a cold. Result he is repairing the damage done. O'Neill Begins 4-Day Brazil Tour By MICHAEL ASTOR 08/04/2002 22:28:42 EST RIO DE JANEIRO, Brazil (AP) - Treasury Secretary Paul O'Neill arrived in Brazil Sunday, beginning a four-day regional tour of South American countries seeking more consistent U.S. support for plans to repair their ailing economies. High on the agenda while he is in Brazil will be discussions about a fiscal bailout package officials want from the International Monetary Fund in order to avoid a debt crisis and assuage financial markets jittery about October presidential elections. O'Neill was criticized last week after he suggested aid money for the South American countries might be diverted to Swiss bank accounts and reiterated his wariness about extending big rescue packages to heavily indebted countries like Brazil. Investors, thinking O'Neill meant Brazil wouldn't obtain key U.S. support needed for an IMF deal, dumped the country's currency and bonds. The Brazilian real then fell to 3.47 to the dollar, its weakest point in its eight-year history. O'Neill soon changed his tune and the real made a recovery. On Thursday he said he favors IMF support for Brazil. He added that the country's economic team "has done a remarkable job of maintaining sound fiscal and monetary policies." O'Neill's reversal reflected a larger change in the Bush administration, which had come to office promising to move away from the big bailouts of the Clinton administration. On Sunday night, O'Neill spent over three hours dining at the house of Central Bank Governor Arminio Fraga in Rio de Janeiro. Also present was Finance Minister Pedro Malan. O'Neill left without speaking to the press. Monday, O'Neill meets in Brasilia with President Fernando Henrique Cardoso and early Tuesday will talk with business leaders in Sao Paulo. From Brazil, O'Neill will travel Tuesday to crisis-wracked Uruguay and Argentina, which also are seeking IMF support for their troubled economies. He is slated to leave Buenos Aires for Washington late Wednesday. Late Sunday, Bush administration officials in Montevideo and Washington announced that an emergency loan of $1.5 billion would be wired to Uruguay at the start of business on Monday. Though O'Neill now backs an accord in Brazil, Cardoso's administration still needs the presidential candidates to support an IMF deal. Before lending more money to Brazil, the IMF has said it would like to see the candidates agree to certain economic policies. Most candidates have said they would be amenable to an accord, but center-left candidate Ciro Gomes, who is in second place in polls and ahead of Cardoso's candidate Jose Serra, has spoken against a loan package. Gomes has blamed Brazil's current $15 billion accord with the IMF, which expires in December, and eight years of tight fiscal policies under Cardoso for hampering economic growth. In the 12 months through March, Brazil's economy grew just 0.3 percent.