MercoPress. South Atlantic News Agency

October challenge

Ricardo López Murphy, an orthodox and experienced economist who believes in balanced budgets is Argentina's new Economy Minister. The former Defence Secretary replaces José Machinea who was unable in his fifteen months tenure, to pull Argentina from a two and a half years recession in spite of a massive international 40 billion contingency assistance.

Mr. López Murphy's nomination received strong support from the Argentine business and financial community, as well as from international creditors, and in his first day in office the depressed Buenos Aires stock exchange reacted with an 8,5% boost. However Mr. López Murphy's main task besides getting the economy rolling again, will be to transmit this new confidence to the Argentine population that has been exposed to ever growing unemployment and poverty. But the success of Mr. López Murphy's task will also depend heavily on the political support that President De la Rúa can muster for an economist considered controversial among the rank and file of the ruling coalition for his very "liberal" stance and among other things, having suggested salary reductions and firing government staff to balance the budget. Significantly the two most outstanding leaders of the current coalition, Mr. Raúl Alfonsín and former vice president Carlos Alvarez were not present at the swearing ceremony in Casa Rosada. The incoming Minister anticipated his full commitment to the one peso-one dollar exchange rate, honoring foreign payments and keeping to the recently approved budget and IMF guidelines.

Mr. López Murphy is considered politically "tough", and more charismatic and pragmatic than his predecessor, who was unable to survive the constant skirmishes from government hard core Congress members who oppose the current "liberal" economic policies.

However, "radicals" and "orthodox" who make up President De la Rúa's administration are well aware that time is scarce: next October Argentina goes to the polls to elect a new Senate and half of the members of the House of Deputies. If the economy does not pick up in the coming months, and the ruling coalition doesn't manage a good showing in the elections, it could be a completely different ball game for all of them.