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Argentina's Debt Default Big News in UK

Wednesday, December 26th 2001 - 20:00 UTC
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Argentina's decision to default on its debts and its refusal to devalue its currency have thrust its crisis back into the headlines in the United Kingdom media, following several days of extensive coverage of its social and political turmoil on television and radio as well as in the newspapers.

London's Financial Times, one of the world's most prestigious and trusted financial newspapers, devoted its front page lead to what it headlined: "Argentina in 155 billion dollar debt default", with sub-headings saying: "Biggest Suspension of Payments in History", and "Third Currency to be created to Kick-start Economy". The newspaper describes the default announcement by new interim President, Adolfo Rodriguez Saa, as " a speech that represented a radical departure from the orthodox, free-market policies of the past 12 years". It describes how his announcement was greeted with a roar of approval in Congress when he declared: "We are going to take the bull by the horns". The paper says: "The third currency represents a transition to a new floating currency, at the same time trying to mitigate the effects of a devaluation on Argentines who have debt in dollars. It also solves a cash shortage faced by federal and provincial governments and could boost spending and help reflate the economy". It quotes President Rodriguez Saa as saying: "This will not hurt anyone and will bring a benefit to Argentine households". The Financial Times says: "He predicted that the International Monetary Fund would look favourably in his plan and added that Argentina would eventually negotiate outstanding debt". The paper devotes a whole inside page to what it calls "Argentina in Crisis", with six articles on various aspects of the development, from correspondents in Buenos Aires, Madrid and London. One article says: "The military is working part-time due to budget cuts. Some of the 600 troops who were preparing to go to Afghanistan as part of a UN peace-keeping force are driving taxis by night to meet their bills. The collapse of the government last week halted their departure".IMF "unlikely" to favour Argentine schemeAnother article says: The International Monetary Fund is unlikely to go along with the Peronists' unorthodox currency scheme..... For the first time in ten years, the government will have the ability to print money to pay its bills. It remains to be seen whether it can control the issuance or whether a return to a hyper-inflationary past beckons". Two articles express fears of the consequences o

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