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Last Updated: Tuesday, 2 November, 2004, 04:54 GMT
Argentina debt offer sparks anger
By Andrew Walker
BBC economics correspondent

Argentina's President Nestor Kirchner
Solving the debt problem is a tricky issue for President Kirchner
Argentina's government says it has presented financial regulators in the US with plans to reorganise the debts it defaulted on nearly three years ago.

Argentina stopped paying private creditors at the end of 2001 as its economic crisis came to a head.

It is now asking creditors to take a deep cut in what they are owed, which totals more than $100bn.

The government offer has already been described as "unacceptable" by some creditor groups.

Argentina's crisis culminated in the suspension of debt payments and the end of the fixed currency policy which had held the peso at one to one against the dollar for a decade.

Although the economy is now growing again, the debt problem remains and solving it is a contentious issue for President Nestor Kirchner.

Argentina has been pressed by the International Monetary Fund and the governments of the rich countries to negotiate seriously with creditors.

Italy, Germany and Japan have been particularly keen to see progress.

They have thousands of citizens who made investments in Argentine government bonds.


The creditors say the offer from Argentina is worth in the region of 25 cents for every dollar they are owed.

Some creditor representatives say there has been no real negotiation.

They describe the offer, and the process by which it has been made, as unacceptable.

Some are taking legal action for repayment.

Argentine officials say the country cannot afford more.

Even if it could, a larger offer would go down badly in Argentine politics.

The offer has now been submitted to financial regulators in the US before being put formally to creditors, who will be asked to respond over the following weeks.

The hostility of many of them suggest that the problem will not be resolved quickly.

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