Argentine president-elect vows "tough" debt default talks

BUENOS AIRES (Reuters) - Argentine President-elect Mauricio Macri plans to push through economic reforms that will buy him time for a "tough negotiation" with U.S. hedge funds suing the country over unpaid government debt. The pro-business Macri, who narrowly won Sunday's presidential election, vows to get the stalled economy moving again but needs to settle a decade-long legal battle with the holdout creditors before he can return to global credit markets. "We want to bring policy solutions that give us time to establish a framework for a tough negotiation so that we can defend the rights of Argentines," Macri told the Clarin newspaper in an interview published on Tuesday. That will mean finding a quick way to bolster the central bank's dwindling foreign currency reserves, which have fallen to a nine-year low below $26 billion as outgoing President Cristina Fernandez battles to prop up the peso currency . A further drop in hard currency holdings could complicate Macri's plans to start dismantling capital controls and trade restrictions, which he says are needed to spur growth, beat down double digit inflation and narrow a gaping fiscal deficit. Macri's opponents warn his proposal to lift quickly controls on the currency and unify the exchange rate will trigger a "mega-devaluation", while his plans to eliminate export taxes on wheat and corn will dent dollar flows into the state coffers. Economist Ricardo Delgado estimated Macri would need to have credit lines worth $10 billion in place "to soften the cost of the corrective reforms". Macri is scheduled to hold talks with leftist Fernandez in a closed-door meeting later Tuesday and seek an orderly transition before he takes office on Dec. 10. The meeting occurs a day after Macri called on the central bank's leadership, including its president, Alejandro Vanoli, to step aside so his government could appoint a team it trusted. Macri's advisors say his reforms would restore investor confidence and bring dollars into the hard currency-starved economy, reducing the need for a swift debt deal with the funds led by billionaire Paul Singer's Elliott Management. The debt battle plunged Latin America's No. 3 economy back into default last year. The holdouts rejected sharp haircuts, or reductions, in the face value of their bond holdings after Argentina's record 2002 default, and they demand full repayment. Many Argentines supported leftist Fernandez's unflinching stance against the creditors and the U.S. judge who ruled in their favour, and Macri has said he will haggle hard in talks. (Reporting by Richard Lough, Sarah Marsh and Walter Bianchi in Buenos Aires; Editing by Alistair Bell and W Simlon)