If Argentina defaults, will the IMF follow? From the International Herald Tribune: “Argentina owes $14.3 billion to the IMF, more than 500 percent of the country’s statutory quota (the generally accepted borrowing limit is 300 percent). Argentina owes the World Bank $8.5 billion, representing nearly 8 percent of the institution’s loans, and the $8 billion the country owes to the Inter-American Development Bank represents nearly a fifth of the bank’s debt portfolio. ‘The IMF will lend them money,’ said John Welch, chief Latin American economist at WestLB in New York. ‘The Fund doesn’t want to have to deal with a default on itself. It is desperate to be seen as a constructive force in Argentina.’ That is so much the case that Thomas Dawson, director of external relations at the IMF, last week labeled it a “matter of urgency” to reach a medium-term agreement with Argentina.
