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Economy Ministry seeks to arrive at agreement with Paris Club
Clarin
July 07, 2008

By Gustavo Bazzan

There are two secret drafts under seal by Minister Carlos Fernandez.

At Economy they are hoping that the struggle with the farm sector ends to take up "the pending agenda." While today it sounds like a far-off issue, here they are recalling that before the explosion of the conflict almost four months ago, and when Mart n Lousteau was minister he sought to quickly move ahead in the negotiations with the Paris Club. Minister Carlos Fernandez didn't abandon this idea. What's more, according to what this newspaper could find out, the finance secretary which is to say the technical area directly involved has already put together two proposals to deal with the creditor governments. The documents were delivered by the Economy Minister to President Cristina Kirchner, who for now has kept them on hold. The two proposals are different in the conditions Argentina would seek to manage from its creditors. There is one that is more ambitious than the other in the financial effort that the country would have to make to normalize a balance close to US$6 billion.

There is a profuse dialogue going on at the technical level with the treasuries of each one of the countries involved, and we are sounding out possibilities and we see that the role of the IMF is not so heavy. We want to take the paved path when they give us the green light, an official source told Clarin.

As far as what the proposals contain, there wouldn't be major changes in relation to what had been offered by Lousteau at his time: a few years grace period and between six and ten years to pay off the debt.

For the Economy Ministry, it's fundamental to bring the discussion with the Paris Club to a close to, the argue, give a positive signal to the financial world, which at the moment only seeks lack of confidence with each move of the Argentine economic policy, as well as in many cases such as with privatized companies directly affecting various member countries of the Paris Club. But those signals are not easy to create on the creditor side. Since 2006, when ex-finance secretary Alfredo Mac Laughlin (a man who has Kirchner's confidence) tried to move the negotiation ahead, the back and forth was constant. More than once he was at the point of signing a deal, but for some reason, the government of N stor Kirchner and now of his wife, postponed it. In March, just as the conflict with the farm sector started, Lousteau had announced in Washington that Argentina was counting on the support of the U.S. Treasury to close a deal.

The current finance secretary, Hernan Lorenzini, is convinced that the issue is a priority and those close to him say that he trusts he'll arrive at an arrangement before the end of the tumultuous year of 2008.