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UPDATE 1-Paris Club, Argentina to work out debt plan
(Adds details, background)
By Tamora Vidaillet
PARIS, Sept 3 (Reuters) - The Paris Club will work with Argentina on the form of its planned $6.7 billion debt repayments before a scheduled meeting of creditor nations later this month, its chairman Xavier Musca said on Wednesday.
One day after President Cristina Fernandez said her government would tap central bank reserves to pay the Paris Club debt in default since a 2001-2002 economic crisis, Musca hailed the news as positive for Argentina's economic credibility.
"We consider that Argentina is taking a good decision if all of this is confirmed and implemented," Musca told Reuters in a telephone interview.
"Nothing can be decided without a unanimous agreement of all the creditors. There will be a (scheduled) meeting on September 15 and Argentina's debt will be discussed," he said.
Between now and the date of that next meeting, the Paris Club would discuss with Argentina's Economy Ministry what was owed to which countries as well as the number of instalments in view, he said.
The $6.7 billion earmarked for repayment consisted of arrears dating back to Argentina's economic crisis, but the South American nation actually held outstanding Paris Club debt totalling $7.9 billion, Musca said.
The difference between the two figures included debt which did not need to be repaid immediately to its Paris Club creditors, he added.
Creditor nations which can expect to be repaid for the arrears included Germany, Japan, Spain, the Netherlands, France, the United States, Italy and Switzerland. Individual debt contracts were probably denominated in both dollars and euros, depending on the lending nations, he said.
Musca said Argentina's plan to use its foreign exchange reserves to pay off its debt was not unprecedented.
Argentina had used the same method to repay debt owed to the International Monetary Fund in the past while Angola had used its forex reserves to reimburse Paris Club debt last November, he said.
Argentina's announcement on Tuesday, made in a televised speech by Fernandez, came as many economists questioned Argentina's ability to meet growing financing needs next year, given high public spending.
Argentina's central bank has about $47 billion in foreign currency reserves, but the centre-left government had previously refused to use these funds to pay off the debt.
