Argentina's Economy Minister Jorge Remes Lenicov tendered his resignation Tuesday to Interim President Eduardo Duhalde, an economy ministry spokesman confirmed. There was no word yet as to whether the president, who was holed up in his official residence meeting with Senate leaders, had accepted the resignation. Local media was reporting that the whole cabinet might submit their resignations.
Mr. Remes' decision to step down from the fledging Duhalde administration was the first serious setback for the President after less than five months in office.
Local economists pointed out several factors had contributed to Mr. Remes' decision to abandon ship, chiefly that he didn't want to get burned by the deteriorating economic and social situation.
They said Mr. Remes at times appeared to be the only cabinet member who really understood the larger picture and the severity of the Argentine crisis.
The country has been stuck in an ever worsening recession over the past four years and earlier this year defaulted on its massive $141 billion public debt.
The Economy Minister had been closely negotiating for fresh funding from the International Monetary Fund. He had also been working with provincial governors, urging them to cut bloated budgets, a sticking point for the IMF to release more money.
Mr. Remes, unlike the majority of Argentina's politicians, realized the country was in chaos and that something had to be done about this, one local economist said. However, at times he seemed unsure exactly how to go about doing so.
Over the past two weeks he has flip-flopped on a variety of issues including moves designed to save Argentina's ever more fragile banking sector.
Some economists said Mr. Remes' fate was sealed when he returned Monday from the annual IMF conference in Washington, DC without fresh funding.
The Argentine government's decision on Friday to indefinitely suspended all banking and foreign exchange operations in the country put more pressure on the Economy Minister to come up with a quick fix.
The government had indicated that banks would reopen once both houses of Congress passed a law converting certificates of deposit into long-term government bonds. But lawmakers said they felt pressured to approve an unpopular measure and the Senate refused to meet Monday or Tuesday to debate the bill causing rumors to fly that Mr. Remes would resign.
Jittery Argentines rushed to cash machines over the weekend to withdraw money in anticipation of the extended banking holiday which left more than half of the country's cash machines without funds. The anger and frustration of having no cash was visible on the streets of Buenos Aires Monday as angry Argentines surrounded the Congress in protest.