IMF agrees loan rescheduling after Argentina defaults

1. Exterior government building Casa Rosada
2. Interior, ministers arriving for press conference – Argentinian President Nestor Kirchner, Finance Minister Roberto Lavagna and Alberto Fernandez, head of cabinet
3. Wide shot all 3 seated, press
4. Mid shot Lavagna, Kirchner and Fernandez seated
5. SOUNDBITE: (Spanish) Nestor Kirchner, Argentinian President:
“We could say that we are almost in agreement (and the economy minister and the head of the cabinet are going to explain this to you as well) and the signs are that Mr Keller agrees, judging by his recent utterances. The letter of intention from the government has been accepted, incorporating the vast majority of changes, almost all of them, that we were working on during this whole session of talks which have been going on for the last few days here in Argentina.”
6. Cameramen
7. SOUNDBITE: (Spanish) Nestor Kirchner, Argentinian President:
“And the important thing is that for the first time in the history of these agreements, there is a clear conceptualisation that all achievements and all implementations of policies have to take place within the framework of social equality, within the framework of economic growth, and that they take into account the issue of poverty and the global climate that Argentina must exist within. Each determination and each goal has a precise reference in terms of a specific clause in the agreement designed to tackle it. This is fundamental for Argentina to have a sustainable future. We consider this a great progress which is perfectly understood by the authorities of the IMF.”
8. Journalists
9. SOUNDBITE: (Spanish) Roberto Lavagna, Argentinian Economy Minister
“Whenever the next meeting of the IMF takes place, Argentina will by then have its usual financial obligations back in place, towards the IMF and other exterior agencies. This normalisation of our obligations will be complete.”
10. Wide shot press
11. The ministers leave

STORYLINE:

Argentinian President Nestor Kirchner announced on Wednesday his country has reached agreement with the International Monetary Fund on the outlines of a three-year, (b) billion US dollar debt refinancing package.

The deal ended months of negotiations and came a day after Argentina defaulted on a .9 (b) billion US dollar debt payment to the IMF – the largest ever by a country.

“This accord will strengthen Argentina and help spur economic recovery,” Kirchner said Wednesday.

Argentina for months had sought a long-term IMF agreement to help bolster its standing with investors and restructure 3 (b) billion US dollars in public debt it defaulted on in December 2001 at the height of a deep economic crisis.

In recent months, the economy has stabilized after a turbulent period that forced a currency devaluation and a 3 (b) billion US dollar debt default overall.

In Washington, IMF chief spokesman Thomas Dawson had no immediate comment and U.S. Treasury officials also withheld public reaction.

Argentina, its economy still badly bruised by the 2001 crisis, skipped a .9 billion debt payment that came due Tuesday afternoon rather than dip into its reserves, leaving the country in default to the IMF.

It wasn’t clear when repayment would be made.

Talks had momentarily stalled last week after the IMF insisted the government implement deeper economic reforms.

The IMF had repeatedly called for Argentina to overhaul the banking sector, compensate banks for losses and hike public utility rates that were frozen since a bruising currency devaluation in 2002.

Kirchner said the final agreement did not include a timetable initially sought by the IMF to impose utility rate increases.

consequent high unemployment and recession.

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