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US Discussing Argentine Economic Crisis - 2001-08-03


A top U.S. Treasury Department official is in Argentina for talks about the country's continuing economic crisis.

Treasury Undersecretary for International Affairs, John Taylor, is in Buenos Aires on a fact-finding trip that comes as Argentina is seeking additional international financial support to rescue its struggling economy.

Mr. Taylor was scheduled to meet Friday with Argentine President Fernando de la Rua and Economy Minister Domingo Cavallo. His visit comes after President Bush telephoned Mr. de la Rua earlier in the week and indicated Washington would support accelerating international aid to the South American nation.

Argentina is struggling to recover from a three-year recession, while at the same time continues making payments on its massive foreign debt. On Monday, the Argentine Senate approved an economic austerity package aimed at cutting spending to help the government meets its debt obligations.

But the austerity measures have provoked domestic protests, and also failed to convince many international investors that the program can succeed in pulling the country out of its economic tailspin.

Argentina is scheduled to receive an additional $2.4 billion in loans from the International Monetary Fund this year, and the next installment is expected to be approved in September. But U.S. Treasury official Taylor told reporters in Washington Thursday that the Bush Administration favors releasing part of this IMF money earlier.

He also indicated a whole range of other options are under discussion, but declined to elaborate. Meantime, the White House has ruled out the possibility of direct U.S. aid for the South American nation.

Argentina has about $7 billion in IMF resources available to it under an existing program. Argentina's public debt of $128 billion represents more than 44 percent of its gross domestic product.

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