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ECONOMY | 07-07-2022 14:20

Paris Club requires Argentina stick to IMF deal to rework debt

Paris Club group of wealthy creditors says government must give assurances that it will comply with IMF deal if talks over restructuring of debt are to continue.

The Paris Club wants Argentina’s government to give assurances that it will comply with its US$44.5-billion refinancing programme with the International Monetary Fund if it is to continue with talks to restructure its debt with the group of wealthy creditors.

Argentina postponed a meeting on Wednesday with officials from the club after the resignation of economy minister Martín Guzmán amid a power struggle within the ruling Frente de Todos coalition. The departure of the official, who was key to averting a damaging default with the Paris Club last year, has raised fears that Argentina will default on its IMF programme.

"We hope that first a new economy minister will reaffirm their commitment to the implementation of the programme, which is a fundamental condition for us to be able to reach an agreement," a senior Paris Club official told reporters on Thursday during a conference call. The official asked not to be identified in accordance with the group's policy.

With such assurances, the group of creditors is more than ready to continue meeting with Argentina to negotiate its 2014 agreement, the official added.

Last year, the Paris Club saved Argentina from default after Guzmán promised to pay US$430 million while renegotiating the rest of the debt. The country got another reprieve in May, when it agreed with the group to postpone US$2 billion in debt repayments for more than two years.

Guzman was expected to travel to France ahead of a meeting on July 6 to continue negotiations.

by Alonso Soto, Bloomberg

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