Candace Vargas

Eco 357L

by Lynda Schuster in Wall Street Journal-June 15, 1984

If Argentina continues to hold its feet on negotiations with the IMF they could see themselves without backing in steps to repay loans made to them by several Latin American countries.

Argentina and it's economy minister, Bernardo Grinspun, made a bold statement to the IMF on Monday, basically saying that it would not make any changes to their deficit spending in order to reach an agreement to receive a loan from the IMF in order to help stabilize their economy. They feel that their proposal is the only realistic means of trying to repair the Argentine economy. The IMF, however, feels "that Argentina meet certain economic goals before the loan is approved." The Argentine government has made it clear that they are completely committed to their proposal and are not budging unless someone can prove their efforts are wrong.

Argentine officials contend that raising wages as opposed to cutting them, as suggested by the IMF, would help to stimulate economic activity. They also feel that they should not reduce importing so much as to hurt the development of the country. They argue that the IMF's propositions will lead the country into civil instability, which is already beginning to show signs of trouble.