U.S. ties Argentina support to reform

Miami Herald ^ | April 25, 2002 | AP

[Cincinatus' Wife]

WASHINGTON - (AP) -- The Bush administration assured Congress on Wednesday that it will insist Argentina reform its economy before the United States will support further loans from the International Monetary Fund.

Treasury Secretary Paul O'Neill said President Bush and others in his administration ''ache'' when they see scenes on television of violent street protests in Argentina.

But O'Neill said the administration and U.S. allies were totally in agreement that Argentina cannot receive new IMF loans until it takes proper reform measures. The country has been seeking what published reports have put at $9 billion in new IMF loans to help stabilize a deepening economic crisis.

O'Neill said that the tough message may have been a contributing factor in the decision by Economy Minister Jorge Remes Lenicov to submit his resignation Tuesday.

Remes Lenicov failed to get new loans or a specific time for negotiations to start on an IMF package following meetings he held with O'Neill and other finance ministers in town for weekend meetings of the IMF and World Bank.

Remes Lenicov presented a personal appeal for new loans to the IMF's policy-setting panel including O'Neill and finance ministers from 23 other countries Saturday.

In discussing new loans, IMF Managing Director Horst Koehler ''has been absolutely clear about the determination the IMF that . . . they are only going to do it when Argentina takes the right steps,'' O'Neill told a House Appropriations subcommittee controlling U.S. funding for the IMF and the World Bank.

O'Neill said it is clear that Argentina will not be in a sustainable economic position until the central government has stronger powers to restrain spending by provincial governments. ''They have got to have an arrangement so that the national government is not at the mercy of whatever the provinces decide to do,'' O'Neill said

[Cincinatus' Wife]

Argentine president vows financial rescue ***Espert, the economist, said the IMF has called on Argentinean governors to make cuts that would force the dismissal of as many as 500,000 employees of the 1.2 million workers now on payrolls of state governments.***

[Free the USA]

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