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		Home Page Mortgage News You Can Use G7 sends powerful warning to Argentina-officials Saturday February 7, 10:08 pm ET By Gilbert Le Gras (Adds Argentina reaction) BOCA RATON, Fla., Feb 7 (Reuters) - The Group of Seven rich nations urged Argentina on Saturday to "engage constructively" with creditors and make good on vows to multilateral lenders, as G7 patience wore thin with hardball tactics from Buenos Aires. "(We) concluded it's awfully important that Argentina live up to its commitments to the IMF, proceed with the reforms that they've committed to do," U.S. Treasury Secretary and G7 meeting host John Snow told reporters. "The requirements (with the IMF are) ... that the country engage in good faith with the creditors," Snow added. Argentina's economy ministry argued late on Saturday it was fully complying with its agreement with the International Monetary Fund and, echoing the G7 statement, added it intended to "achieve the highest participation possible" in debt talks while balancing the needs of its population. One in two of Argentina's 36 million people now live on a dollar a day following an economic collapse in 2002 that the IMF has said surpassed the severity of the Great Depression. Buenos Aires has held firm to its offer to private bondholders last September of 25 cents on each dollar of nominal debt -- an offer analysts say is at best worth 10 cents on the dollar if overdue interest payments from the last two years are factored in. IMF Managing Director Horst Koehler and Argentine Economy Minister Roberto Lavagna are to meet in Miami on Monday. Many G7 officials in this plush Florida resort city expressed frustration with Argentina's slow progress in restructuring its $88 billion in defaulted debt and implementing other reforms it promised the fund in September. Japan, Italy and the United Kingdom last week were among eight countries on the IMF's 24-member executive that took the unusual move of abstaining from backing a review of Argentina's loan program to voice their irritation at the foot-dragging. Britain's Chancellor of the Exchequer Gordon Brown said Britain withheld its support at the IMF because he "wanted to be sure they (Argentines) would carry out promised reforms." France is also annoyed and teetering toward abstaining -- or withholding its consent -- on the second IMF review vote, due March 9. Sources said other G7 members were also mulling such a step. Paris has been irked by the way Buenos Aires has treated its public utility operators. Argentina last month canceled a contract held by French defense group Thales, which runs local mobile telephone operations, due to unmet conditions. President Nestor Kirchner has warned another French-owned firm -- Suez unit Aguas Argentinas -- of consequences if the water company does not make investments to upgrade infrastructure. Analysts see a chance the IMF could delay the March 9 vote on the second review of Argentina's loan, setting the scene for a repeat of September's brief default by Buenos Aires on the Washington-based global lender's credit. "The situation between Argentina and the G7, in the form of the IMF, is headed for a showdown. You can't have serious negotiations when the banks want 65 cents (on each dollar of defaulted bonds) and they are offering (10 cents)," one G7 source said. Argentina is one of the IMF's biggest debtors, holding 16 percent of the lender's outstanding credit, but one G7 official said resolve was firming among the rich industrialized nations to draw the line with Buenos Aires -- even if it ends in Argentina defaulting on its IMF debt. Back to Original Article: Mortgage News You Can Use   Continue with: In Bush's Policies, Business Wins Bush the Budget Buster Bush the Budget Buster part two In GOP Country, Job Fears Economic indicators: The Week Ahead Bonds Economy Reacts to Jobs Report Dollar Diplomacy U.S. Wins Support for Dollar Flexibility U.S., 13 Nations Negotiate Trade Deal Sluggish Job Growth May Threaten Recovery Bush Defends Economic Record as War President Corporate Profits Don't Lead to Hiring
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