The provincial economy minister, Silvina Batakis, said last week that Buenos Aires would pay its debts as usual this year despite a finance crunch that has pushed up provincial bond yields to near-record levels

Autor: esteban Datum: Heute, 22:11

BUENOS AIRES, July 19 (Reuters) - Argentina's government said on Thursday that it would send more financial aid to Buenos Aires province, allowing the country's biggest district to pay back wages as demanded by striking state employees. The province was unable to pay a routine salary bonus to public servants in early July and offered to pay it in two installments through Aug. 15. State office workers, hospital employees and teachers rejected the pla n. Provincial finances are suffering due to slowing tax revenue growth as the Argentine economy cools and high spending linked to double-digit inflation. Buenos Aires represents nearly 40 percent of Argentina's gross domestic product. On Thursday, Economy Minister Hernan Lorenzino said the federal government would send another 600 million pesos (US$132 million) in financial aid to Buenos Aires province and allow the province to issue a 900 million peso bond, backed by revenue from a national tax-sharing scheme, to pay debts to providers. This comes on top of the 1 billion pesos transferred to the province earlier in July. Gov. Daniel Scioli said in a statement the new funds would allow his government to complete the bonus payment next week. Scioli had initially asked the federal government for 2.8 billion pesos in aid to cover the salary bonus. The request became mired in politics after Scioli ran afoul of center-left President Cristina Fernandez by confirming that he hopes to run for president in 2015, once her second term is up. A fellow Peronist, Scioli served as vice president under Fernandez's late husband and predecessor, Nestor Kirchner. He is seen as more center-right, and both Fernandez and Kirchner have balked when he showed signs of acting autonomously. "The president has resolved ... to tend to the situation of state workers in the province and the provision of essential services on the part of the provincial government," Lorenzino said. Scioli initially proposed to pay the salary bonus in four installments, but last week his government made the first disbursement and vowed to pay the rest on Aug. 15. To get his hands on the needed cash, Scioli ordered spending cuts and struck a deal with casino operators, who agreed to make an extraordinary payment to state coffers in exchange for a renewal of their licenses ahead of time. The provincial economy minister, Silvina Batakis, said last week that Buenos Aires would pay its debts as usual this year despite a finance crunch that has pushed up provincial bond yields to near-record levels. The province faces debt obligations of about $395 million on dollar- and euro-denominated bonds during the rest of the year, according to data released in December. Fernandez has suggested the shortfall in Buenos Aires was due to Scioli's "mismanagement," although many other provinces are also facing spiraling deficits.