Argentine Reforms Backing Grows

SANTA ROSA, Argentina — Argentine President Eduardo Duhalde said Monday that provincial governors and legislators from his Peronist Party agreed to comply with conditions of International Monetary Fund aid within a week.

Duhalde announced the promise after meeting Peronist leaders in the central province of La Pampa. Duhalde threatened to resign last week after governors and Congress failed to act on a similar pledge made a month ago.

“Time has run out,” Duhalde said in a speech from La Pampa, where he was flanked by governors and Juan Carlos Maqueda, president of the Senate. “We’ve decided that this week we will carry out the objectives we have set.”

Duhalde has struggled to persuade provinces to cut spending and Congress to alter laws as demanded by the IMF after the country defaulted and devalued. The government is betting an IMF agreement will free up financing for exports and help end a recession that’s increased unemployment to 25% and left more than 40% of the population in poverty.

The IMF, which cut off financing in December, has told Duhalde to get all 23 provinces to commit to reducing deficits by 60%. So far, seven have signed agreements.

“The IMF needs a plan that looks sustainable while governors face political constraints,” said Freddy Thomsen, senior economist for ING Bank Argentina. “Governors will probably sign knowing they will never meet the targets if the recession continues.”

Buenos Aires, the country’s biggest province, said it is negotiating with the economy ministry and IMF officials to reduce its deficit by less than 60%.

“I’ll only sign if I get financing from the government,” said Buenos Aires Gov. Felipe Sola.

Duhalde persuaded Peronist senators to strike down today a so-called economic subversion law that judges have used to prosecute bankers.

Congress appointed Duhalde to the presidency five months ago after food riots and a freeze on bank accounts toppled former President Fernando de la Rua.