IMF's Köhler Welcomes Progress in Talks with Argentina

Horst Köhler, Managing Director of the International Monetary Fund (IMF), made the following statement in Washington today after discussions on June 27-28 between IMF Management and staff, and visiting Argentine officials, led by Minister of Economy Roberto Lavagna:

"IMF Management and staff, and the visiting Argentine officials, led by Minister of Economy Roberto Lavagna, have held productive meetings. Two legal issues, concerning the reform of the Insolvency Law and the repeal of the Economic Subversion Law, have been satisfactorily resolved; and Minister Lavagna has assured us that substantial further progress may be expected next week on the outstanding issues concerning the central government's fiscal agreements with the provinces. Consequently, Argentina and the IMF are entering an active negotiating relationship, focusing on four areas:

• Finalizing the fiscal framework;

• Addressing the critical problems with the banking sector;

• Developing an effective monetary anchor for the authorities' economic program. The Argentine authorities and ourselves are giving consideration to identifying a group of experienced policy makers that might assist Argentina and the Fund in the design of a monetary framework; and

• Reinforcing Central Bank independence.

We will pursue discussions actively in all these areas, including through staff missions to Argentina to accelerate momentum toward a Fund-supported program."