New Argentine President Stops Debt Payments

29/05/2001| IslamWeb

BUENOS AIRES, Argentina (Reuters) - Argentina on Sunday swore in an interim president who immediately called new elections for March and canceled payment on a crippling public debt to try to ease the poverty behind bloody riots that toppled the previous government.
Adolfo Rodriguez Saa, who will lead the country for 99 days, declared a moratorium on the 132 billion debt, which could herald the largest default in history. Rejecting pressure to devalue the peso, which is pegged to the dollar, he said a new currency would circulate alongside the peso to ease a cash crunch.
As looters and peaceful protesters alike brought down Fernando De la Rua's government last week, the United States, the International Monetary Fund and foreign banks signaled that the social and political costs of keeping up debt payments had become unacceptable for the country's 36 million people.
U.S. Treasury Secretary Paul O'Neill said on Friday it was ''quite clear'' Argentina, Latin America's third largest economy, could not service its outstanding debt, and France and Italy said they could no longer back IMF-prescribed austerity measures.
Rodriguez Saa belongs to the Peronist Party, which was thrust into power last week following De la Rua's exit, two years ahead of schedule.
The scion of a provincial political dynasty, Rodriguez Saa has run the small Western state of San Luis for 18 years and earned a reputation for capable and investor-friendly government.
His task will be keeping the country on an even keel until elections on March 3, when a president and vice president will be chosen to complete De la Rua's term until the end of 2003. The Peronists, who ruled from 1989 to 1999 and dominate Congress, are widely expected to win.
Rodriguez Saa, 54, is Argentina's third head of state in four days. The unpopular De la Rua, elected two years ago, was whisked from the roof of his palace by helicopter on Thursday as protesters battled with police outside.
His resignation, and that of Economy Minister Domingo Cavallo, followed nights of rioting in Buenos Aires and provincial capitals. The toll was 27 people dead, hundreds of shops and supermarkets ransacked and more than 2,000 arrests.
De la Rua was replaced for two days by Ramon Puerta, the Peronist head of the Senate, according to the constitution.