on ohter issues, the US Embassy here in Uruguay is closed for two days: mail apparently infected with Anthrax was detected. It is said the mail was delivered in Mexico.-jj
Ian Murray wrote:
> Argentine President Addresses Economy
>
> By Serena Parker
> Associated Press Writer
> Thursday, November 1, 2001; 8:10 PM
>
> BUENOS AIRES, Argentina -- President Fernando De la Rua went on
> national television Thursday night offering an ambitious rescue plan
> for Argentina's ailing economy that proposes new measures to chip away
> billions of dollars from the country's heavy debt burden.
>
> Speaking in a prerecorded national address, the president sought to
> defuse a week of growing investor uncertainty over the country's
> ability to avoid default on its $132 billion in debt, vowing his plan
> would in no way interrupt debt servicing payments to creditors.
>
> "We will meet our obligations" to creditors, De la URA said in an
> address from the pink Government House. He vowed Argentina would not
> default or devalue its peso currency because of the grave economic
> crisis.
>
> He said he wanted to reduce the debt-servicing costs that have forced
> the cash-strapped state to dispense with hundreds of millions of
> dollars a month to creditors. The plan called for bringing high
> interest rates down to single digits.
>
> In his most important economic address in two years in power, the
> president bluntly told his 36 million compatriots that they simply had
> rung up far too much debt and that the country had no other choice but
> to take bold steps and seek a voluntary debt renegotiation
>
> De la Rua and Economy Minister Domingo Cavallo want to restructure the
> country's debt load by offering greater payment guarantees in exchange
> for lower interest rates. The president said he was seeking new bonds
> at interest rates of 7 percent.
>
> It's not clear if foreign lenders would be willing to accept such a
> move, which Cavallo's team characterized as "voluntary." Nervous
> markets had been awaiting the plan all week and the first test of its
> soundness is expected when trading resumed Friday.
>
> Credit agencies have warned that a debt swap might be considered a
> partial default.
>
> De La Rua also called for the nation to rally behind him in a time of
> crisis. He went ahead with his announcement despite a political
> impasse that continued Thursday with 23 provincial governors who
> balked at his calls to enlist in his effort to balance the budget.
>
> The debt crisis has worried Wall Street and emerging markets for
> months as Argentina teetered on the brink of a possible default.
>
> Argentina's unemployment rate has been stuck in double digits for
> years, the economy is stumbling after seven punishing rounds of
> austerity measures, and some cash-strapped provincial governments have
> resorted to paying state workers partly with bonds in lieu of cash.
>
> With state coffers dwindling, De la Rua is locked in a bitter
> political impasse with the governors over the federal government's
> failure to pass along more than $500 million in tax revenue owed to
> the provinces.
>
> But the government has said it doesn't have the money at a time when
> Argentina must come up with $1.1 billion to service its debt this
> month and another $774 million in December.
>
> The International Monetary Fund apparently has no immediate plans to
> come to the rescue, as it has twice already since December. An IMF
> official, Thomas Dawson, told reporters in Washington Thursday that
> releasing any funds ahead of schedule was "not in the cards" at this
> time.
>
> Argentina's next IMF loan is a $1.3 billion installment that will be
> available in December.
>
> Argentine governors resumed meetings Thursday to discuss the federal
> government's proposal for spending cuts and tax-revenue sharing
> measures. But differences remained between the two sides.
>
> As well as offering a strategy for debt, the president on Thursday
> also offered sales tax relief to those who make purchases with credit
> cards. He also proposed modest payments to low-income households and
> the unemployed to spur consumer spending.
>
> However, critics say far more needs to be done to encourage consumers
> to begin spending again, a necessary step to raise badly needed tax
> revenue to pay off the debt. On Thursday, the government announced
> that collected taxes fell 11 percent in October after plunging 14
> percent in September.