MercoPress. South Atlantic News Agency

Cavallo remains under arrest.

Argentina's former Minister of Economy Domingo Cavallo remains under arrest after Judge Julio Speroni rejected an appeal by his lawyers. Mr. Cavallo was put under arrest last Wednesday in connection with a probe into illegal arms sales during the early nineties under the Carlos Menem administration when he occupied two different cabinet posts, Foreign Affairs and Economy.

The charges are "aggravated smuggling" a crime involving war material that has a sentence of four to twelve years in jail.

Judge Speroni has ten days to decide whether to continue with the case or set him free.

Mr. Cavallo as a member of the Menem administration allegedly authorized arms shipments to Ecuador and Croatia between 1991 and 1995, in contravention of international treaties.

This is a significant change in the public life of Mr. Cavallo, a renowned economist who during his first period with the Menem administration was hailed as a savior after managing to defeat hyperinflation and stabilize the economy, making Argentina a showcase and star among emerging markets.

However during his second attempt under the De la Rúa administration he failed to reverse a four years recession and actually is blamed for making things worse, particularly the freezing of deposits and bank accounts.

Former president Menem and several of his closest aides were also arrested last year in connection with the same case but finally were set free.