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Argentina's New Cabinet Is Sworn In

Government: The nation reportedly fails to make a $28-million debt payment to Italy.

January 04, 2002|From Times Staff and Wire Reports

BUENOS AIRES — Argentina's new president, Eduardo Duhalde, unveiled his Cabinet on Thursday amid expectations of an imminent devaluation of the currency and reports that the country formally defaulted on a portion of its mountain of public debt.

Meanwhile, White House Press Secretary Ari Fleischer told reporters that President Bush, vacationing at his Texas ranch, had sent Duhalde a congratulatory letter and planned to telephone him as well.

But Treasury Department officials continued to rule out any direct U.S. aid, saying new support would come from the International Monetary Fund and other multilateral lending agencies and would be offered only after the new government has developed a credible economic plan.

The Reuters news agency reported that Argentina failed to make a $28-million payment on an Italian bond as new Cabinet Secretary Jorge Capitanich confirmed that virtually bankrupt Argentina was unable to meet its obligations. A default by Argentina on its full $132-billion public debt would be the nation's biggest.

Duhalde, who swore in his Cabinet a day after taking office as the fifth president in two weeks, is expected to outline part, if not all, of his economic plan today. He made no comment regarding his plans Thursday. He has vowed to chart a new economic course that is likely to include ending a decade-old policy that anchors the peso on a one-to-one basis to the U.S. dollar and allowing a devaluation of the peso.

Cabinet members came mostly from the ranks of Duhalde's Peronist party. Economy Minister Jorge Remes Lenicov is a longtime Duhalde confidant from the president's days as governor of Buenos Aires province. Carlos Ruckhauf, the province's most recent governor, was named foreign minister.

To calm Argentines enraged by a partial freeze that limits money withdrawals to $1,000 a month, Duhalde's team reportedly will announce a 180-day timetable for removing the measure. Duhalde said Tuesday that Argentines will eventually be able to withdraw their funds in the currency in which the deposits were made.

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