Finance secretary Guillermo Nielsen implicitly rejected this when, the following day, he said that `any debt restructuring can only be considered successful if the renegotiated obligations can be met with the debtor's payment capacity.' Even non-governmental sources in Argentina consider the 75% `haircut' the outer limit of what Argentina is able to pay. One important group of creditors, the association of Argentine pension fund administrators (who jointly hold 20% of the defaulted bonds), has told the government that it is willing to negotiate. Others are threatening legal action: the first attempt to seize Argentine assets is due to take place in February — which reinforces the IMF deadline.
PARAGUAY | Dramatic rise in fiscal revenues. Paraguayan government employees have been told that, for the first time in years, they will be collecting their aguinaldo (thirteenth salary) on time. This is because tax receipts have shot up in the last three-and-a-half months, registering year-on-year increases of 32% in August, 36% in September, 53% in October and 39% in November. In all, the state coffers have received G/410bn (US$68m) more than expected — a sum equivalent to just over a third of the fiscal deficit projected for year-end. This has happened as a result of a tightening of collection procedures, but as yet without the assistance of tougher legislation drafted by the government.
BRAZIL | Auto industry shows nature of upturn. In the first eleven months of the year, Brazil's auto industry produced 1.67m vehicles, just 1.1% more than in the same period of 2002. This is largely the result of greater sales abroad, which generated a 38.9% increase in earnings — while sales on the domestic market were down by 6.8%. Actually, manufacturers are relieved that the government's decision to lower taxes on smaller cars prevented the domestic slump from being steeper by encouraging an upturn in sales in November.
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