lennart
19-03-04, 00:14
Argentina and Brazil urge IMF to relax rules
By Raymond Colitt in São Paulo
Published: March 17 2004 4:00 | Last Updated: March 17 2004 4:00
The presidents of Brazil and Argentina yesterday forged a common front in demanding more flexibility on loan requirements from the International Monetary Fund in order to allow faster economic growth.
Luiz Inácio Lula da Silva and Néstor Kirchner called on the IMF to relax its primary budget surplus requirements - budget savings needed to service debt. They also argued that public investments in infrastructure and social projects should not be considered government expenditures and therefore should be excluded from the required budget surplus.
Their joint statement in Rio de Janeiro came as Anne Krueger, IMF interim managing director, suggested that Argentina should increase its primary budget surplus beyond 3 per cent of gross domestic product. Buenos Aires, which only last week narrowly avoided defaulting on IMF debt, said it planned to stick by the target.
In recent weeks, Mr Lula da Silva has called the leaders of the US, France, Germany, Spain and the UK to seek support for the plans.
Together, Argentina and Brazil account for roughly half of the IMF's outstanding loans. Both have been caught in recent years between the obligation to slash expenditure and increase taxes to service debt, and the need to stimulate their economies and meet demand for jobs and social improvements.
The solidarity with Buenos Aires is part of Mr Lula da Silva's aim of strengthening regional integration as a bargaining chip in international negotiations. "The Argentine government is extremely satisfied with the response we have received from the Lula government," said Rafael Bielsa, Argentina's foreign minister. "We are encouraged by the deepening of these accords and the co-operation between two brotherly nations."
Yet, at the same time, Brazil's economic team, which has held to extreme economic orthodoxy to win over investor confidence during its 15 months in power, breathed a sigh of relief when Argentina decided not to default on its IMF debt.
Brazil has a $14.8bn (€12bn, £8bn) fund loan deal, under which it must run a much higher primary surplus of 4.25 per cent of GDP.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1079419693388
Dit is een belangrijk partnerschap, want Argentinie en Brazilie zijn samen goed voor meer dan 50% van de uitstaande schulden bij het IMF. Als zij samenwerking met het IMF opzeggen, betekent dat meteen het einde van het fonds, het zou dan effectief failliet zijn. De afgelopen weken zijn zowiezo al spannend geweest bij het IMF, omdat Argentinie moeilijk deed over een betaling aan het IMF. Daar is toen op het laatste moment een oplossing voor gevonden, maar daarmee zijn de problemen voor het fonds nog niet voorbij.
By Raymond Colitt in São Paulo
Published: March 17 2004 4:00 | Last Updated: March 17 2004 4:00
The presidents of Brazil and Argentina yesterday forged a common front in demanding more flexibility on loan requirements from the International Monetary Fund in order to allow faster economic growth.
Luiz Inácio Lula da Silva and Néstor Kirchner called on the IMF to relax its primary budget surplus requirements - budget savings needed to service debt. They also argued that public investments in infrastructure and social projects should not be considered government expenditures and therefore should be excluded from the required budget surplus.
Their joint statement in Rio de Janeiro came as Anne Krueger, IMF interim managing director, suggested that Argentina should increase its primary budget surplus beyond 3 per cent of gross domestic product. Buenos Aires, which only last week narrowly avoided defaulting on IMF debt, said it planned to stick by the target.
In recent weeks, Mr Lula da Silva has called the leaders of the US, France, Germany, Spain and the UK to seek support for the plans.
Together, Argentina and Brazil account for roughly half of the IMF's outstanding loans. Both have been caught in recent years between the obligation to slash expenditure and increase taxes to service debt, and the need to stimulate their economies and meet demand for jobs and social improvements.
The solidarity with Buenos Aires is part of Mr Lula da Silva's aim of strengthening regional integration as a bargaining chip in international negotiations. "The Argentine government is extremely satisfied with the response we have received from the Lula government," said Rafael Bielsa, Argentina's foreign minister. "We are encouraged by the deepening of these accords and the co-operation between two brotherly nations."
Yet, at the same time, Brazil's economic team, which has held to extreme economic orthodoxy to win over investor confidence during its 15 months in power, breathed a sigh of relief when Argentina decided not to default on its IMF debt.
Brazil has a $14.8bn (€12bn, £8bn) fund loan deal, under which it must run a much higher primary surplus of 4.25 per cent of GDP.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1079419693388
Dit is een belangrijk partnerschap, want Argentinie en Brazilie zijn samen goed voor meer dan 50% van de uitstaande schulden bij het IMF. Als zij samenwerking met het IMF opzeggen, betekent dat meteen het einde van het fonds, het zou dan effectief failliet zijn. De afgelopen weken zijn zowiezo al spannend geweest bij het IMF, omdat Argentinie moeilijk deed over een betaling aan het IMF. Daar is toen op het laatste moment een oplossing voor gevonden, maar daarmee zijn de problemen voor het fonds nog niet voorbij.