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Tuesday, 19 February, 2002, 00:43 GMT
IMF urged to help Argentina
Argentines protest
Argentina's crisis is dominating the Mercosur talks
The South American trade bloc, Mercosur, has appealed to international lenders to do more to help Argentina as it draws up a plan to rescue the economy.

At a summit meeting in Buenos Aires, regional leaders pleaded with organisations such as the International Monetary Fund to understand the complexity of Argentina's problems.


We do not agree that Argentina must first make efforts and then receive aid

Ferdinand Henrique Cardoso
President of Brazil
Correspondents say the Mercosur appeal is likely to put pressure on the IMF to speed up arrangements for a bailout package.

Until now, the IMF has told Argentina to put its finances in order before it will release any funds.

Brazil's President, Ferdinand Henrique Cardoso, was blunt.

"We do not agree that Argentina must first make efforts and then receive aid," he told reporters. "It should be simultaneous."

Last week, German Chancellor Gerhard Schroeder proposed that the aid should be disbursed gradually, as Argentina carries out anti-crisis measures.

But Mr Cardoso disagreed. "This aid requires an effort by Argentina, but we know this effort is already under way."

In a joint statement, Mercosur leaders asked "multilateral creditor organisations to understand the complex situation in Argentina, and appreciate that the support [Argentina] is asking for is connected to internal policies that will allow for economic growth".

The statement reflects their fears that unless rapid action is taken to stabilise Argentina - which its president, Eduardo Duhalde, is describing as a "ticking timebomb" - the effects will spill over across the region.

Strife continues

As if to underscore their concerns, there were again clashes between police and demonstrators in Argentina.

Seven arrests were made as police broke up an anti-government protest in the north-western city of Salta, according to local media.

And in Buenos Aires, disgruntled customers continued to besiege banks, demanding their long-frozen dollar deposits back.

Meanwhile, the latest blow to hopes of recovery came from oil workers, who say they will start an indefinite strike against job cuts from Monday, threatening to bring refineries to a standstill.

The oil industry has been one of the few areas of success in Argentina's economy.

Mercosur damage

Brazil has come with some gestures to ease tariffs against Argentine imports and try to repair some of the damage done to Mercosur by the Argentine crisis over the last couple of years.

During this time, the trading bloc has almost ceased to function, with wide disparities in currency values undermining trade agreements.

But now that Argentina has devalued its currency, some are hopeful Mercosur could be revived.

President Duhalde said ahead of the conference that the biggest help that other Mercosur presidents could offer in the short term is to put pressure on the IMF to bail Argentina out.

The country has been cut off from new IMF credit since last year.

While Argentina's crisis has not caused a collapse of markets elsewhere in the region, economists are predicting that it will hit growth rates across Latin America.

See also:

12 Feb 02 | Business
Argentina's peso passes first test
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