-Caveat Lector-
Argentina to get extra $8 billion
IMF offers increase in stand-by loan
ASSOCIATED PRESS
WASHINGTON, Aug. 21 - The International Monetary Fund said Tuesday
it will offer Argentina an additional $8 billion in loans in an
effort to help the country through a severe economic crisis.
The decision will boost the economic resources the IMF
will make available to Argentina to $22 billion, up from the
current level of $14 billion in support, according to IMF Managing
Director Horst Koehler.
Koehler made the announcement on the 12th day of talks
Argentine officials were holding in Washington with the IMF.
The announcement marked the latest effort by the IMF to
stabilize a severe economic crisis in Argentina, which is
struggling to pull out of three years of a steep recession.
Argentina's problems have sent shock waves through financial
markets in Brazil and other countries in the region, raising fears
of a repeat of the 1997-98 Asian currency crisis.
In a statement, Koehler said that $5 billion would be added
to Argentina's emergency credit line immediately upon approval of
his recommendation by the IMF's 24-member executive board. Koehler
said the other $3 billion would be added later.
Koehler made his announcement after several hours of
closed-door talks with the IMF's 24-member executive board. Because
of the way the IMF operates, Koehler would not have made the
announcement of increased support if he had not won the go-ahead
from the executive board.
Koehler's statement also said that Argentine authorities
were "considering the possibility of a voluntary and market-based
operation to increase the viability of Argentina's debt profile."
Koehler did not elaborate in his brief statement on that
comment. However, U.S. officials have said that Argentina needed to
restructure its $130 billion foreign debt burden to make sure that
the country does not have to continually come to the IMF to seek
help in repaying the loans.
Argentine President Fernando De la Rua has expressed
confidence that his country can meet its debt crisis and pull out
of a severe recession that has sent the unemployment rate soaring
above 16 percent.
However, a new austerity program he imposed to lower the
government's deficit has sparked widespread street protests.
Government workers were unhappy with the austerity program's 13
percent cut in their wages.
The Argentine negotiating team in Washington was led by
Finance Secretary Daniel Marx, who has spent the past 12 days in
intense discussions with IMF officials.
The $8 billion in new IMF loans was at the high end of the
reported $6 billion to $9 billion that the Argentine negotiations
had been seeking.
© 2001 Associated Press. All rights reserved. This material may not
be published, broadcast, rewritten or redistributed.
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