January 22, 2016 / 9:17 AM / 2 years ago

Argentina's Macri hopes for creditor deal early in 2016

DAVOS, Switzerland (Reuters) - Argentine President Mauricio Macri said on Friday that talks with U.S. creditors in a long-running legal battle over unpaid debts had not made much progress, although he hoped to reach a settlement early this year.

“We want to reach a settlement, find a fair agreement,” Macri told Reuters on the sidelines of the World Economic Forum in Davos, adding that he hoped to reach a deal “this year, early this year”.

Macri said the biggest sticking point in the discussions was the issue of penalties on Argentina’s defaulted bonds.

“We don’t want to discuss capital, we want to discuss penalties which are really high. In some cases penalties arrive to 80 percent and in case of one bond capital is 10 cents and penalties are 90 percent,” the president said.

Macri, who was sworn in as president in December, confirmed Argentina’s next meeting with U.S. court-appointed mediator Daniel Pollack on the talks was scheduled for Feb. 1, after an effort to meet during January failed.

“We are ready for a fair agreement. We hope (the) mediator will have room to finish this conflict and hope holdouts will be happy with the agreement and I get approval of my Congress,” Macri said.

The Argentine president said he had not met with Paul Singer who heads Elliott Management Corp, which is one of the of main litigants, during his visit to Davos.

Separately, Argentina’s central bank has been working on loan deals with banks since early December. Last week, the country’s finance minister signaled the agreement for between $4-6 billion to help bolster reserves.

“We made good progress, very good progress. We expect an announcement very soon,” Macri said of the loan plan.

NEW CHAPTER WITH IMF

Argentina's President Mauricio Macri speaks with British Prime Minister David Cameron (unseen) as they meet in hotel Belvedere during the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland January 21, 2016. REUTERS/Ruben Sprich

As part of Argentina’s re-integration into international financial markets, Macri also said that he wanted to re-engage with the International Monetary Fund (IMF).

“Yes, we have to go back to the IMF in terms of fulfilling Article 4, like every country in the world,” he said.

Article 4 is a feature of IMF membership which provides for regular monitoring of economies and associated provision of policy advice. The last Article 4 Executive Board Consultation for Argentina was in July 2006, according to the IMF’s website.

Macri said now was the “best time” for investors to put their money into Argentina, which had the capacity to produce food for 600 million people.

“For that we need infrastructure. We need roads, ports… for that we need financing. We are near (to having) the worst logistics in Latin America. That’s a great opportunity also for companies and investors.”

He raised concern about human rights in fellow South American country Venezuela.

“We are fully committed to defending human rights and Venezuela does not respect human rights. My principles will not change and I still think Venezuela is not respecting human rights. They have politicians in jail with no reason.”

Macri, 56, also recalled doing business with Donald Trump some 32 years ago, describing the Republican presidential hopeful as “a very tough negotiator” and a “better negotiator than golf player”.

Asked what he thought about Trump’s idea of building a wall along the U.S. border with Mexico to stop the flow of illegal immigrants, Macri said:

“In the 21st century, I don’t think it is the way forward.”

Editing by Alexander Smith

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