Argentina Pleads for Renewed Aid

Argentina pleaded for renewed international financial help Sunday to overcome its deep economic crisis, warning of more social and political upheaval if rescue loans are not forthcoming.

“To overcome the crisis sooner, we need the support of the international community, not just with words but with loans and funds,” Argentine Economy Minister Jorge Remes Lenicov said.

Otherwise, the crisis will deepen and the government may not survive to the September elections, Remes told international investors and finance officials from across the hemisphere at the annual meeting of the Inter-American Development Bank.

“It is continuity or anarchy. That is the risk we see,” Deputy Economy Minister Jorge Todesca told reporters.

Finance ministers from other Latin American nations, keen to avoid financial turbulence spreading to their economies, backed Argentina’s call for assistance from the International Monetary Fund and other lending agencies.

The IMF last week reopened negotiations with Argentina, whose new government has floated the peso currency and begun to lift controls imposed last year to avoid a run on the banks.

Remes and Todesca met with U.S. Treasury Undersecretary for International Affairs John Taylor, who praised the changes Argentina is making.

“We had a good set of meetings and exchanged information about a number of things,” Taylor said. “There certainly have been a lot of talks and a lot of good discussions with the IMF, and the [Argentine] Central Bank is making good changes.”

Executives of private international banks facing major losses in Argentina said they felt encouraged after hearing Remes lay out his game plan for recovery in South America’s second-largest economy.

But the bankers said they were far from knowing whether Argentina will be viable enough for them to continue operating in the country, where their assets were hit by devaluation.

“Things are going in the right direction, but we are still a long way from knowing whether the system is viable or not, and whether it is feasible to continue operating there,” said an executive of a European bank.

The source said a lot will hinge on an agreement with the IMF on an economic program that will unblock $9 billion remaining from a rescue package granted to Argentina last year.

That program was suspended in November because of Argentina’s failure to control spending and reduce its fiscal deficit.

In December, Argentina declared default on its $141-billion public debt, amid banking restrictions that angered the public and set off protests that ousted two presidents in two weeks.

The peso has lost half its value since devaluation in January.

Argentina’s economic output, pummeled by financial crisis and a four-year recession, will shrink dramatically in the first half of this year but will return to growth in the last two quarters, Todesca predicted.