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Time to Talk, Seriously

Mar 1, 2004

The G-7 finance ministers have told Argentina to negotiate with creditors or risk losing further IMF support.

"There have been many twists and turns in the road since Argentina defaulted in December 2001. A decisive turning point came during the G-7 finance ministers meeting in Boca Raton, Florida last month. Irritation with Argentina had turned to anger. The ministers told Economy Minister Roberto Lavagna to begin negotiating properly with bondholders - whom the government had largely ignored for the last two years -or risk being cut off from further International Monetary Fund support.

They told Lavagna to meet with Horst Köhler, the Fund's managing director, immediately and show how the government would make a good faith effort to negotiate with bondholders. Nothing less could force the Fund's board to withhold approval for a $3.1 billion loan disbursement, needed to roll over a maturing IMF loan. President Néstor...

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“The crisis has been a setback for reserve diversification."

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