The accord was reached between the Argentine government and the IMF’s management Sept. 10, but required the backing of the fund’s shareholders.

IMF executive board chair Anne Krueger noted Argentina had already made a “welcome start” this year in restoring economic stability, cutting unemployment and controlling inflation.

However, she noted risks remain in part because “key elements of fiscal and banking reform that are crucial to sustainability will only be formulated at a later stage.”

She called for “decisive policy actions” by the government to minimize the risks.

The package will allow Argentina to refinance US$21 billion in upcoming payments to institutions including the IMF, the World Bank and the Inter-American Development Bank.

Under the terms, Argentina is committed to control spending at the federal and provincial levels to achieve a 2004 budget surplus of 3 percent of gross domestic product, excluding interest on debts. It also will submit tax reform legislation next year with the aim of introducing it in 2005.

Responding to a push from European governments to allow private utilities to raise prices that are now frozen, Argentina will aim to get legislation passed this year that will allow its executive branch to make such decisions. European companies run most of the utilities Argentina privatized in the mid-1990s.

Negotiations now can start between the government and its private creditors on restructuring US$100 billion in debts it defaulted on in December 2001. The government’s proposal, due Monday, is expected to seek a write-down of 60 percent to 80 percent.

In a meeting Saturday in Dubai, U.S. Treasury Secretary John Snow urged his Argentine counterpart, Roberto Lavagna, to move as quickly as possible, but said Washington doesn’t want to interfere.

“It is up to Argentina to determine the trade-off between its debt restructuring offer and its primary surplus,” a senior U.S. official said, quoting Snow.

He quoted Lavagna as telling Snow that the latest economic data indicated gross domestic product will expand 6.5 percent this year, well above the government’s current growth target of 5.5 percent.