MercoPress. South Atlantic News Agency

Argentina announces an understanding with the Paris Club on defaulted debt

Kicillof is heading the negotiations and was described as very 'skillful'

Following twelve hours of discussions the Argentine delegation headed by Economy Minister Axel Kicillof managed on Wednesday to agree the main points for Argentina to overcome the approximately 9.5bn dollars default with countries that make up the Paris Club, according to late reports from the French capital.

 Apparently the original one day negotiation will continue on Thursday to finalize the drafting of the final accord, before Kicillof returns to Buenos Aires with the terms of the understanding, described as 'very favorable for Argentina' and excluding any auditing from the IMF.

A final report is expected from Buenos Aires during Thursday morning.

The Paris negotiations started at 10:00 in the morning sharp with Kicillof explaining some of the terms of the proposal he had delivered last January. This was followed by questions from representatives of the 19-country club. Negotiations were presided by Ramon Fernandez, head of the French treasury.

Of the total debt Japan is the main creditor with 30.6% followed by Germany, 27.7%; Holland, 8.7%; US and Italy, 7.6% and 7.5%; Spain, 5.2%; Switzerland, 4.1%; Canada, 3%; France, 2.5%; UK, 1.3% and Austria 0.9%. Other countries have lesser percentages. As expected the toughest demands came from Japan and Germany.

Kicillof's team includes Finance Secretary Pablo Lopez, and members of the debt re-negotiation unit, Hernan Lorenzino and Adrian Cosentino.

On Wednesday morning Argentine Cabinet Chief Jorge Capitanich referred to the meeting in Paris saying that “the negotiation is complex” and stressed that the government seeks “the best possible agreement”.

“The negotiation is complex, agreements need to be reached regarding several issues,” Capitanich said at his daily press briefing at Government House in Buenos Aires.

“First we need to agree on a definition of the amount of the debt, then there is the interest rate, establishing settlement policies and the debt’s maturity”. He also praised Kicillof as a “skillful” and “great negotiator” who will seek the “best possible agreement for Argentina, with prudence and good judgment, taking into account Argentina’s objective conditions regarding the country’s payment capability”.

Paris Club Press Release.