March 12, 2014
Gov’t wants a new agreementSunday, January 19, 2014
Kicillof to negotiate debt in Paris tomorrow
Economy Minister Axel Kicillof is scheduled to arrive in Paris tomorrow where he will try to reopen negotiations on the estimated 9.5 billion dollars that Argentina owes to the Paris Club of creditor nations after it defaulted on sovereign debt in 2001.
The situation is not easy. After several failed attempts, Argentina will try once more to renegotiate the debt the country owes to the Paris Club without the intervention of the International Monetary Found (IMF).
Kicillof flies today to France to meet with the members of the club of creditor countries. He travels with Finance Secretary Pablo López, and in France they will meet with Kicillof’s predecessor Hernán Lorenzino, who is current head of the Debt Renegotiation Unit, an office created to oversee the country’s debt repayment efforts.
“The intention is to have a first contact and demonstrate a genuine will to reach an agreement,” was the only official information released about tomorrow’s meeting, according to a statement issued on Friday.
Argentina’s debt with the Paris Club varies according to estimates, but it ranges between 6.7 billion and 9.5 billion dollars.
Refinancing the Paris club debt could reopen the doors of the international financial markets for Argentina. Those doors have been closed since the default of 2001.
Most of the defaulted debt was restructured in 2005 and 2010, but Argentina never reached an agreement with the Paris Club. Previous negotiations were frustrated by Argentina’s refusal to accept the Paris Club imperative of letting the IMF audit the negotiations. Since the payment in 2005 of the total of the debt contracted with the IMF, the country is trying to avoid its monitoring. Allowing the IMF to monitor negotiations means also accepting its conditions, such as austerity measures or having to explain official data about the local economy.
The Paris Club is a consortium composed by 19 creditor countries for debts incurred exclusively in commercial transactions. Its main function is to coordinate payment forms and jointly renegotiate the debt. It is an informal forum, located in the French capital, integrated by Germany, Australia, Austria, Belgium, Canada, Denmark, the United States, Spain, Finland, France, Ireland, Italy, Japan, Norway, Russia, the Netherlands, United Kingdom, Sweden and Switzerland.
Ninety percent of Argentina’s debt with it is spread over six countries: Japan, the Netherlands, Switzerland, United States and Germany.
Herald Staff with Télam