Bloomberg News

U.S. Lawmakers Tie World Bank Funds to Pressure on Argentina

October 12, 2011

Oct. 12 (Bloomberg) -- U.S. lawmakers are trying to block development loans to Argentina and seek out allies to pressure President Cristina Fernandez de Kirchner to settle with holders of defaulted debt in exchange for funding development banks.

The measures are attached to a bill that authorizes a combined $1.4 billion capital increase at development banks over several years, including the World Bank. The House Financial Services Committee’s panel that oversees development banks today approved the proposed legislation, which would then require a vote by the full committee.

Under the proposed legislation, U.S. directors at the World Bank and the Inter-American Development Bank should “oppose any loan to the government of Argentina” and “initiate discussions with other executive directors at the respective bank to advocate and vigorously promote efforts to encourage Argentina to normalize relations with its official and private creditors and elsewhere in the international community.”

The U.S. has already started to vote against loans to Argentina in the strongest move to date against Fernandez, who polls show will win a second, four-year term in the Oct. 23 presidential election. The goal is to have Argentina make payments owed investors and settle with holders of defaulted debt, as well as respect obligations with institutions such as the International Monetary Fund.

--Editors: Robert Jameson, Jonathan Roeder

Chris Wellisz at cwellisz@bloomberg.net

To contact the reporters on this story: Sandrine Rastello in Washington at srastello@bloomberg.net;


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