ARGENTINA: GOVERNMENT PRESENTS UNITED POLITICAL FRONT IN FACE OF FINANCIAL TURMOIL

Record ID: 337960

  • Title: ARGENTINA: GOVERNMENT PRESENTS UNITED POLITICAL FRONT IN FACE OF FINANCIAL TURMOIL
  • Date: 19th July 2001
  • Summary: (W7) BUENOS AIRES, ARGENTINA (JULY 17, 2001) (REUTERS) 1. SLV EXTERIOR OF GOVERNMENT HOUSE; SLV ARGENTINE FLAG (2 SHOTS) 0.09 2. MV JOURNALISTS 0.13 3. SLV GOVERNORS ARRIVING; SLV CONFERENCE; MV GOVERNORS ARRIVING (4 SHOTS) 0.38 4. MV ARGENTINE ECONOMIC MINISTER, DOMINGO CAVALLO, ARRIVING 0.42 5. SCU ARGENTINE PRESIDENT FERNANDO DE LA RUA ARRIVING 0.47 6. MV GOVERNORS AND DE LA RUA SITTING 0.52 7. SLV/SCU DE LA RUA SIGNING AGREEMENT; CEREMONY (6 SHOTS) 1.26 8. (SOUNDBITE) (Spanish) ARGENTINE PRESIDENT FERNANDO DE LA RUA SAYING "I express my recognition. I think that this will bring confidence in the markets, and will show the solidity of our economy and that there is leadership that acts with responsibility and that can rise to their duty in difficult times. A country that can show unity before complicated situations." 1.53 9. MV DE LA RUA SHAKING HANDS WITH GOVERNORS; MV JOURNALISTS (2 SHOTS) 2.07 10. (SOUNDBITE) (Spanish) GOVERNOR OF SANTA CRUZ, NESTOR KIRSCHNER, SAYING "We will guarantee that we will put all our effort so that there will be no cuts in retirements." 2.14 11. MV CAVALLO OUTSIDE 2.18 12. (SOUNDBITE) (Spanish) CAVALLO SAYING "When Argentines believe in the commitments assumed by its leaders and we believe in ourselves all our problems will be solved. I think that what we have just seen it is a very important act of political and institutional responsibility." 2.42 13. MV CAVALLO LEAVING 2.47 14. SLV/MV PROTEST (2 SHOTS) 2.56 Initials Script is copyright Reuters Limited. All rights reserved
  • Embargoed: 3rd August 2001 13:00
  • Keywords:
  • Location: BUENOS AIRES, ARGENTINA
  • Country: Argentina
  • Reuters ID: LVAA96Y49SO6HRPSNE36W5V0BH61
  • Story Text: Argentina has presented a united political front in the
    face of financial turmoil, as a pact with opposition governors
    helped firm shaky financial markets worldwide.

    Governors from the opposition Peronist Party agreed to
    sign on to President Fernando de la Rua's "zero deficit" plan
    late on Monday (July 16). The plan calls for the federal and
    provincial governments to spend no more than they take in as
    tax revenues.

    "I think that this will bring confidence in the markets,
    and will show the solidity of our economy and that there is
    leadership that acts with responsibility and that can rise to
    their duty in difficult times. A country that can show unity
    before complicated situations," said De la Rua after signing
    the pact on Tuesday (July 17).

    News of the agreement, after four days of negotiations,
    eased spreads on dollar bonds in Asia, and sent U.S. and
    European government bond yields higher in Europe.

    The governors made clear their adherence to the plan had
    more to do with fears of a financial meltdown than heart-felt
    support for the unpopular spending cuts, which will slash most
    pension payments and government worker salaries by 13 per cent.

    "We will guarantee that we will put all our effort so
    that there will be no cuts in retirements," said Santa Cruz
    governor, Nestor Kirschner.

    Emerging market bonds were stronger in early trade on
    Tuesday (July 17), and in Latin America, the Brazilian real
    and Mexican peso firmed as investor fears that Argentina, in
    its third year of economic stagnation, would be unable to
    service its debt.

    Argentine stocks jumped 4.3 per cent in early afternoon trade
    while the country's benchmark 2008 global bond rose 3.875 points
    to 59.375 per cent of face value on news of the accord.

    "When we Argentines believe in the commitments assumed by
    its leaders and we believe in ourselves, all our problems will
    be solved. I think that what we have just seen it is a very
    important act of political and institutional responsibility,"
    said Economy Minister, Domingo Cavallo, after the signing.

    The pact brought Argentina back, at least momentarily,
    from the brink of financial collapse, though how much De la
    Rua can ask of Argentines, who now must swallow the seventh
    wave of spending cuts since he took office in late 1999, is
    unclear.

    A small group of protesters took to the streets on
    Tuesday, but the General Workers' Confederation, the country's
    largest umbrella group of unions, called a nationwide strike
    for Thursday (July 19) to protest the spending cuts and seek
    the resignation of Cavallo, who drew up the plan.


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