BUENOS AIRES, Dec 23: Argentina on Sunday swore in an interim president who immediately suspended payments on crippling public debt to alleviate the poverty behind bloody riots that toppled the previous government.
Adolfo Rodriguez Saa, caretaker leader until elections in March, declared a moratorium on the 132 billion dollars 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 will circulate alongside it to ease a cash crunch.
“The Argentine state will suspend the payment of foreign debt. This is not a rejection of foreign debt ... but rather the first move by a rational government to deal with the foreign debt correctly,” Rodriguez Saa said in his inaugural speech to soccer chants of “Argentina! Argentina!” from his supporters.
As angry 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 signalled that the social and political cost of keeping up debt payments had become unacceptable for the country’s 36 million people.
US Treasury Secretary Paul O’Neill said on Friday it was “quite clear” Argentina could not service its outstanding debt and Argentina’s European allies France and Italy said it could no longer stand IMF-prescribed austerity measures.
Rodriguez Saa hails from the Peronist Party which has been thrust into power by De la Rua’s fall from power two years early. Since the last dictatorship ended in 1983 he has run the small province of San Luis and is credited with making it an oasis of fiscal discipline and growth.
He will lead Argentina until elections on March 3, when a president and vice president will be chosen to complete De la Rua’s mandate until the end of 2003. The Peronists, who ruled from 1989 to 1999 and dominate Congress, are expected to win.
Rodriguez Saa, 54, is Argentina’s third head of state in four days. 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 his unpopular Economy Minister Domingo Cavallo, followed long, hot summer nights of rioting and peaceful protests by the middle class in Buenos Aires and provincial capitals. The toll was 27 people dead, hundreds of shops and supermarkets ransacked and more than 2,000 arrests.
DEBT: The new president, smiling and suntanned, signalled he was ready to negotiate with foreign creditors. International bond holders, multilateral lenders and local financial institutions hold the most of the public debt.
“International markets will react well because we will negotiate with them,” Rodriguez Saa told reporters as he left Congress in downtown Buenos Aires.
PLUMP SALARIES CUT: With an ear to protests at fat government wages, Rodriguez Saa announced the sale of official cars and the presidential jet and banned public salaries above his 3,000 dollars monthly wages.
Politicians said the new currency, not yet named, would be used to pay state wages, pensions and Christmas bonuses which could put back some life into a dormant economy.—Reuters
BUENOS AIRES, Dec 23: Argentina on Sunday swore in an interim president who immediately suspended payments on crippling public debt to alleviate the poverty behind bloody riots that toppled the previous government.
