Argentina begins negotiations with Paris Club

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Argentina and France have taken “preliminary” steps toward resolving the South American country’s long-running default with Paris Club lender countries, Argentine Economy Minister Amado Boudou said Friday.

Since it is no longer possible for Argentina to repay the $6.7 billion debt out of reserves as it had initially proposed last year, the country is looking for “new solutions” with debtor nations, Boudou said.

He was speaking on the sidelines of the G-20 summit in Pittsburgh, where Thursday night he held a bilateral conversation on the matter with French Finance Minister Christine Lagarde.

Resolving the Paris Club default is “very important because it means not only that Argentina can resolve its debt but also that the private sector can access finance from European, Japanese and American firms,” Boudou said.

Boudou said the forthcoming meetings in Istanbul of the World Bank and International Monetary Fund would be used to further these discussions. He didn’t mention discussions on the role the IMF would play.

Paris Club member nations have long insisted that for Argentina to restructure its debt, it must be in a program with the IMF. However, a host of obstacles lie in the way of a deal with the multilateral lender, with which Argentina has a strained relationship.

Source: Wall Street Journal