Argentine bank freeze backed
BUENOS AIRES, Argentina (AP) --The lower house early Thursday joined
the Senate in approving a key economic bill
aimed at propping up Argentina's tottering financial system by tightening the four-month-old banking freeze.
In a much-needed boost for President Eduardo Duhalde, the Chamber of
Deputies passed the measure about 3 a.m., having stayed in
session after the Senate approved the bill late Wednesday.
The law also prevents depositors who win lawsuits against the banking
restrictions from collecting their money until the government
has had the chance to appeal.
Banks in Argentina have been closed since Monday, leaving many Argentines
scrambling to get their hands on cash. The freeze is
meant to keep depositors from yanking out their savings and causing a financial meltdown.
The congressional thumbs-up was a rare piece of good news for Duhalde,
who is facing the worst crisis of his four-month-old
administration after Economy Minister Jorge Remes Lenicov handed in his resignation Tuesday.
Remes Lenicov will step down Friday, with the government promising to
pick his replacement over the weekend. He will continue in
government as the president's chief economic adviser.
Reports indicated that Remes Lenicov's most likely replacement will
be Roberto Lavagna, the country's ambassador to the European
Union and a former commerce secretary said to have good ties to both of Argentina's main political parties.
Duhalde spent much of Wednesday wrangling with political leaders over
the appointment and what steps the government should take
to deal with a devastating four-year recession that has left Argentina's economy on its knees.
On Wednesday afternoon, Duhalde signed a 14-point plan that contained broad economic intentions but few details on new policies.
It included promises to pursue fiscal and monetary discipline, respect international agreements and guarantee a solid banking system.
"We are living in a time of many difficulties," Duhalde said after meeting
provincial governors. "We are going to redouble our efforts
and, God willing, we will soon be putting this situation behind us."
But analysts were not convinced the plan gave Argentina the clear route
ahead that markets had hoped for and international aid
agencies have demanded in exchange for further help.
"These 14 points don't move us any nearer a clear set of policies,"
said Oscar Liberman, President of Mercado Libre, an
Argentina has been seeking a reported $9 billion in loans from the International
Monetary Fund to help stabilize the deepening economic
In Washington, Treasury Secretary Paul O'Neill also seemed unconvinced that Argentina was on the right track.
Appearing before the House Appropriations subcommittee controlling U.S.
funding for the IMF and the World Bank, O'Neill said
Argentina's economy will only recover when the central government tackles deficit spending by provincial governments.
"They have got to have an arrangement so that the national government
is not at the mercy of whatever the provinces decide to do,"
Meanwhile, in a television interview late Wednesday, Duhalde said he
was considering returning Argentina to a fixed exchange rate in
the coming weeks.
Duhalde abandoned Argentina's 11-year-old currency peg with the U.S.
dollar on Jan. 6, saying a strong peso was a main cause of
Argentina's four-year recession.