Argentina to Meet IMF Aid Conditions

Argentina's government won partial approval of legal changes demanded by the IMF as conditions for economic aid after a brawl-filled day in Congress.

And the arguments are likely to continue on Friday as the lower house tries to revive a controversial "economic subversion" law that the Senate voted to abolish. Critics say the measure is loaded against bankers.

During debate on changes to a bankruptcy law also demanded by the IMF and seen by critics as punishing creditors, legislators lunged at each other after a US flag was thrown onto the desk of the lower house chairman by a dissident deputy.

"Please take that flag off my desk," Camano said. Argentines see the International Monetary Fund as US-dominated and the IMF-pressed bills have sparked criticism the government is kowtowing to Washington.

The lower house eventually passed the measure and the Senate is to take it on Friday at 11 a.m. (1400 GMT), while the lower house will try to revive the so-called economic subversion measure.

"The Senate abolished the economic subversion law, but here we will not ratify that," lower house Chairman Eduardo Camano's spokesman said. "It will go to a lower house committee and the suggested amendments will be sent back to the upper chamber."

Revival of the law -- first introduced in 1974 to stop leftist guerrillas from receiving financing, but little used since -- could deal President Eduardo Duhalde a stinging setback in his attempts to woo multilateral lenders and foreign investors.

"There is no willingness to (abolish) this law," said ruling Peronist party Congressman Eduardo Di Cola of the "economic subversion" law. The IMF wants it scrapped before it will consider possibly resuming aid talks.

RACE AGAINST THE CLOCK

In office only four months after two predecessors quit amid deadly riots sparked by a four-year recession, President Eduardo Duhalde has sought speedy approval of the two legal changes to win billions of dollars in foreign aid.

Nearly half of Argentina's population now lives in poverty and a quarter of the workforce is unemployed.

But Duhalde, Argentina's fifth leader since mid-December, must rebuild foreign investor confidence in a government prone to policy U-turns and power struggles among powerful provincial governors, analysts say.

Argentine judges triggered an international uproar by using the "economic subversion" law this year to question several foreign and local bankers and prevent them from leaving the country pending an investigation.

Bankers now shun ties and jackets to avoid being attacked on their way to work. Their clients must enter and leave past armed police guards as banks operate behind metal shutters amid street protests from angry depositors who have seen the savings devalued.

After the vote to scrap the law on Thursday, the Senate immediately approved separate articles to the penal code that would punish with possible jail terms acts or speculation that disrupts business or fraudulently brings down the value of commodities or goods.

(China Daily May 10, 2002)