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Montevideo, December 1st 2022 - 20:53 UTC

 

 

Another nerve racking week

Monday, December 17th 2001 - 20:00 UTC
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After having barely avoided default by appealing to pension funds to honour a 700 million US dollars instalment, Argentina faces another hectic week in an attempt to comply with the IMF suggestion of a balanced 2002 budget, --which necessarily means a political understanding--, if the multilateral organization is to disburse further credit. Last week ended with the government in disarray: a successful general strike with strong backing from cash-strapped small businessmen, supermarket lootings, an official record 18,3% unemployment, people desperately queuing in banks trying to withdraw money, the resignation of one of the most respected members of the Finance Ministry team and a complete disbelief in Argentina's political leadership. However former president Carlos Menem, as head of the Justicialista opposition party, met with president De la Rúa and promised his full support with the budget and coincided in keeping the one peso to one dollar pegged currency and the eventual dollarization of all bank deposits if needed to avoid devaluation. Mr. Daniel Marx, contact man with international creditors, in spite of his resignation said he will remain until negotiations with Argentina's creditors regarding the restructuring of the country's debt are complete. A task he expects to be over in three crucial months. But President De la Rúa and Finance Minister Domingo Cavallo, who appeared last March as saviour of the situation, have lost public opinion and business support, and the ruling party anticipated it will not agree to further cuts in the budget. Peronists are also divided on the issue but since now they hold a clear majority in Congress and nominated a Peronist vice president, it is believed they could ensure a responsible attitude to help overcome the worst for a future Peronist government when Mr. De la Rúa's term is over in 2003, or even before... Actually in 1989 a previous Radical government, under president Raúl Alfonsín, was forced to anticipate elections and turn government over to Carlos Menem, when Argentina was overwhelmed by hyperinflation, social unrest and supermarket looting. It was Mr. Menem, acting with Finance Minister Domingo Cavallo, that in 1991 pegged the peso to

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