Accessibility links

Argentina Economic Recovery Plan Delayed Following Court Ruling - 2002-02-02

Argentina's president has delayed announcing an economic recovery plan after the country's supreme court made a decision that raises new questions about the future of the economy. The ruling has forced Argentina's economy minister to cancel a visit to the World Economic Forum in New York.

Argentina's highest court ruled Friday that government imposed bank limits violated the country's Constitution.

The ruling touched off a debate between the court and the government. A court spokesman says the ruling benefits all depositors while the government says only citizens with pending legal cases will benefit from the ruling.

The surprise court ruling caught President Eduardo Duhalde and his advisors off guard. He canceled an address Friday night. Instead, the president spoke briefly to reporters gathered at the president's residence in the Buenos Aires suburbs.

Mr. Duhalde said the supreme court's ruling only 48 hours after the congress initiated hearings into the court's action was extremely grave and that while people might be happy with the ruling, he feared the worst. The president said he feared banks would fold and that only the lawyers and a few connected Argentines would see any money, while millions of depositors would lose their savings and their hope.

The president said he would tell Argentines how he plans to get the country back on track at a later date.

The government also said that Economy Minister Jorge Remes Lenicov has postponed a scheduled trip to the U.S. and will announce the new economic plan once the situation had "calmed down."

Mr. Remes was set to attend the World Economic Forum in New York City where he had hoped to present Argentina's economic recovery plan. Although the IMF and the U.S. are both worried about Argentina's social unrest spreading to other South American countries, they are not prepared to give Argentina a blank check.

Instead, the IMF and the U.S. Treasury have conditioned additional financial aid for the struggling nation on Argentina's ability to present a sustainable economic plan.