- - - - - - - - - - - - By Kevin Gray
Jan. 15, 2002 | BUENOS AIRES, Argentina (AP) --
Argentines angry over a banking freeze ransacked banks and torched ATMs on Tuesday as President Eduardo Duhalde vowed to eventually relax curbs that have brought the financial system to a standstill.
Rage over the 6-week-old restrictions shutting off Argentines' access to their savings boiled over around the country, mixing with the rising anger of unemployed workers who took to the streets demanding jobs.
In three cities in Argentina's interior, hundreds of Argentines stormed banks, ripping out computers and smashing window fronts. Several international banks, including Citibank and BankBoston, were among branches that were targeted.
Duhalde defended the restrictions on cash withdrawals, saying it was the only way to protect Argentine savings and a preserve an increasingly wobbly banking system.
"This time bomb will explode if we don't carefully dismantle it," he warned. "And millions of depositors won't see their savings."
Duhalde, in his first meeting with foreign reporters, said the financial problems and social unrest have paralyzed the economy, placing Argentina on the brink of "anarchy and chaos." But he pledged to put the country's finances back in order before he leaves office in 2003.
As he spoke, thousands of unemployed Argentines living government subsidies of less than $80 a month marched on the Labor Ministry, blocking traffic as men on bullhorns shouted out demands for jobs. They later marched to the president's offices, which was blocked by riot police and barricades.
"I want work, not a few pesos that I can't even support my family on," said Pedro Tabuada, 38, who lost his job as a steakhouse cook five months ago. Unemployment is now a near-record 18.3 percent.
But it was the banks that felt the brunt of the social discontent. The banking freeze, first imposed Dec. 1 to stem a run on the banks after Argentines pulled $2 billion from the banking system in a day, triggered deadly street riots last month that forced Fernando de la Rua to resign.
After taking office as Argentina's fifth president in a month, Duhalde further tightened access to dollar accounts. Argentines hold $46 billion, or 72 percent of all deposits, in such accounts.
The limits mean Argentines who have their wages directly deposited in banks can only withdraw 1,500 pesos -- now about $1,070 dollars at the official rate. Those with ordinary checking accounts can withdraw 1,200 pesos monthly, or about $850.
In the central province of Sante Fe, some 7,000 demonstrators took to the streets of the city of Casilda on Tuesday, hurling eggs at banks. Riot police responded with tear gas and rubber bullets. A small core of violent protesters threw rocks at bank windows and vandalized ATM machines.
Argentines also unleashed their anger at banks in the cities of La Plata, where they set fire to ATM machines, and in Salvador de Jujuy, where they ripped out computers, trashed offices and smashing windows in three bank branches, including Citibank and BankBoston outlets.
Duhalde said the restrictions are meant to protect regular Argentines, not just the banks.
"The people can believe that we are defending the banks, but we are defending the savings of the people," he said.
The International Monetary Fund closed off the spigot of bailout funds last month, leaving the country to default and devalue the peso, which for nearly 11 years was pegged one-to-one with the dollar.
A fact-finding IMF mission is in Buenos Aires. But Duhalde has said Argentina would only seek emergency funds once it has developed a clear economic program to rescue the country from four years of recession.
"We will go with our own plan, our own project, our own model, which we believe foreign lenders will agree to," Duhalde said after a top Economy Ministry official berated the IMF this past weekend for its criticism of Argentine economic policies.
Among the new steps, Duhalde said, would be a move to float the peso on the open market within five months. The peso is now set to an official rate of 1.40 pesos to the dollar, but mainly for foreign trade. For ordinary Argentines, the peso on the open market floats, hovering at 1.80 to the dollar.
Duhalde said he was leaving the economic decisions to his top economic officials, instead focusing on containing a rapidly disintegrating social situation he called a "depression."
"We feel like we are in a swamp," he said. "And we still don't know if we've hit bottom yet. This country seems to be sinking -- but not because of a great accident like the Titanic, but because everything is a mess."
Associated Press