(Bloomberg) -- The group of rich government creditors known as the Paris Club is willing to delay a $2.4 billion debt payment from Argentina due this month if the nation meets certain conditions, potentially averting a damaging default, according to three people with direct knowledge of negotiations.The club will spare Argentina from default if it misses the May 31 payment in the hope that the country can rework a $45 billion credit with the International Monetary Fund, said one of the people, who asked not to be named because the talks are private. An agreement with the IMF may not come until after Argentina’s midterm elections later this year, the person said, declining to specify the conditions that the group is demanding.The Paris Club secretariat declined to comment, citing its policy not to publicly discuss ongoing negotiations. Argentina’s economy ministry press office didn’t reply to a request of comment.Argentina’s President Alberto Fernandez extended his European tour to meet IMF Managing Director Kristalina Georgieva in Rome on Friday in a bid to drum up support for a delay and renegotiations with the IMF. Argentina has formally asked the Paris Club for more time to make the payment and is expecting to receive a response by the end of the month.Georgieva said in a statement that the face-to-face gathering was “very positive” and that she will consult IMF members on the country’s request for a reform to the organization’s surcharge policy.“The goal is to reach an agreement as soon as possible, though we can’t be thinking of an accord that demands greater efforts from the Argentine people,” Fernandez said after the meeting, which lasted over an hour at the Sofitel hotel in Rome.Argentina dollar-denominated bonds due 2030 edged up 0.4 cents to 35.2 cents on the dollar and bonds due 2038 rose 0.6 cents to 37.3 cents on the dollar, the most in two months. The Argentine peso, which is managed by authorities through capital controls, lost almost 11% this year in the second biggest depreciation among emerging market currencies.Read More: Argentina Urges IMF to Suspend Surcharges on $45 Billion LoanThe deadline comes at a difficult time for the administration in Buenos Aires, with the country in its third year of recession, inflation approaching 50% and unemployment over 10%. While analysts’ estimates of its cash reserves vary, some calculations have put them near zero since September of 2020, limiting Argentina’s capacity to meet its international obligations.International PariahThe temporary Paris Club waiver aims to ease the economic ravages wrought by the pandemic, but it needs to be tied to conditions so it doesn’t turn into a habit, said one of the sources. Argentina has defaulted on its overseas debt nine times in its history.“Nobody wants Argentina to become an international pariah again,” said Rodrigo Olivares-Caminal, a professor in banking and finance law at Queen Mary University of London. “A default would be negative for Argentina and its creditors. But I’m concerned about Argentina’s endemic balance of payment problem.”In May 2014, Argentina reached a deal with the Paris Club to repay a $9.7 billion debt after 13 years in default. The debt was supposed to be repaid over a five-year period, but the country’s latest financial troubles delayed the final payments due this month. Creditors include the U.K., Italy, Spain and Canada.A Paris Club rule known as a “conditionality principle” states that the group only negotiates debt restructuring with debtors that have “a demonstrated track record of implementing reforms under an IMF program,” according to the group’s website. Argentina ceased following guidelines from a program with the IMF after a change of administration in late 2019, and talks for a new plan have stalled.Read More: Paris Club Seizes Pandemic Opportunity to Reclaim Lost Influence(Adds comments from the IMF’s Georgieva in fifth paragraph, updates market reaction in seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.