From: [EMAIL PROTECTED] Subject: [R-G] IMF "instrumental" in engineering Argentina's financial collapse -- creditors (BBC) http://news.bbc.co.uk/hi/english/business/newsid_1722000/1722935.stm BBC (London) December 21, 2001 IMF "instrumental" in engineering Argentina's financial collapse -- creditors The IMF was "instrumental" in engineering Argentina's financial collapse because of irresponsible lending which "exacerbated" its foreign debt problem, foreign creditors have claimed. Argentine people have seen their pensions taken away, unemployment soar, inflation jump and their industries decimated. "The IMF... were instrumental in engineering this, lending an additional huge amount of money this year," Hans Humes, of Van Eck Emerging Market Funds and spokesman for a New York-based committee of Argentina's foreign creditors told the BBC's Today Programme. Foreign creditors expect the collapse of the government to delay a restructuring of the nation's $132bn (�91.2bn) public debt and cause a default. One rating agency said it will cost private investors half of the $97bn (�66.9bn) face value of their claims. The International Monetary Fund decided two weeks ago to cut Argentina's $22bn credit line but denies it is to blame for the country's troubles. Debt swap unlikely Argentine President Fernando de la Rua resigned on Thursday as violence engulfed the country. The widespread riots and looting were in response to more than four years of harsh austerity policies demanded by the IMF to repay the debt. President de la Rua was only halfway through his four-year term and quit just hours after economy minister Domingo Cavallo. The resignations mean the country is unlikely to be able make its planned 20 January debt swap. By swapping out of current bonds and into new low interest bearing loans, the government had hoped to cut its heavy debt servicing payments. IMF blamed "They (IMF) were really the last lenders to Argentina and have exacerbated the debt overhanging the country," said Mr Humes, adding the IMF should take its share of losses. "This is a market where you make your own risk estimates and that should apply to the private sector as groups like the IMF who are way over their budget for lending to Argentina," he said. "It's going to cut across everybody, banks, insurers, pension funds, every financial institution would have some exposure," Mr Hume said. Default rating Fitch, the credit ratings agency, said on Thursday that Argentina is likely to default on about $97bn of outstanding debt owed to private creditors. The agency also said it did not believe that Argentina's currency peg, under which one peso is convertible into one US dollar, was viable, indicating a devaluation is the only option. "The combination of a disorderly default and devaluation implies that creditors will ultimately be forced to write off at least 50% of the face value of their claims on the Argentine government," Fitch said. _________________________________________________ KOMINFORM P.O. Box 66 00841 Helsinki Phone +358-40-7177941 Fax +358-9-7591081 http://www.kominf.pp.fi General class struggle news: [EMAIL PROTECTED] subscribe mails to: [EMAIL PROTECTED] Geopolitical news: [EMAIL PROTECTED] subscribe: [EMAIL PROTECTED] __________________________________________________
