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Sunday, 28 April, 2002, 15:09 GMT 16:09 UK
Argentine banks set to re-open
lavagna
Roberto Lavagna faces a huge challenge
Argentina's new economy minister, Roberto Lavagna, will re-open his country's banks on Monday.

The banks have remained shut for eight days, other than for a short period on Friday set aside for bill paying and making deposits.


We are going hungry, we are not trying to loot the bank, we just want our own money back

Argentine lady queuing at bank
The re-opening risks a chaotic rush to withdraw cash since many Argentines are now desperate for money.

"I haven't had cash for eight days now and since no one accepts cheques or bank cards, my family is getting pretty hungry," said Angel, a window washer.

""We are going hungry, we are not trying to loot the bank, we just want our own money back," said a woman in line at the Formosa provincial bank which was later pelted with stones.

On the brink

Mr Lavagna, Argentina's sixth economy minister this year, says his main task is to end the closure of financial institutions.

Currency markets and the stock exchanges were also closed last week.

Mr Lavagna, who was sworn in on Saturday, said the closures "created enormous uncertainty and paralysis in the nation".

Mr Lavagna's appointment comes as the country faces the deepest economic crisis in its history, with its whole financial system teetering on the brink of collapse.

Social unrest

Cash shortages have brought much of the economy to a standstill, with many shops and businesses shutting down rather than accept payment in possibly worthless government bonds.

demo
Riot police have been on guard outside banks
They have also imposed further economic hardship on a country already racked by high levels of unemployment after four years of recession.

Riot police stood guard over bank buildings in some regions on Friday as angry crowds protested outside, in a sign of growing social unrest.

Plans by Argentina's farmers to suspend food deliveries in protest over erratic agricultural policies look set to further exacerbate the situation.

Workers were at first able to withdraw money from current accounts using automated teller machines, but most of these are now empty.

Emergency measures

The banking freeze was designed to buy the government enough time to force through legislative changes aimed at stemming the flood of deposit withdrawals.

The Argentine Congress earlier this week backed a proposal which would make it more difficult for savers to mouth legal challenges against withdrawal restrictions first imposed in December.

But a separate proposal, under which a proportion of all bank deposits would have been converted into government bonds, was rejected, prompting the resignation of Economy Minister Jorge Remes Lenicov on Tuesday.

Some economists believe that the measures introduced so far will merely postpone a collapse of the banking system.

Attempts to persuade the International Monetary Fund to resume lending - suspended late last year after Argentina missed repayments on parts of its $140bn debt - proved fruitless earlier this week.

The debt default marked the beginning of the present crisis.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Sonali Gudka
"The banks have been shut for eight days"
See also:

25 Apr 02 | Business
Argentina tightens banking freeze
26 Apr 02 | Business
Brief respite for hard-up Argentines
24 Apr 02 | Business
Economy chief loses the plot
25 Apr 02 | Business
Argentine stories: Patricia Otero
25 Apr 02 | Americas
Argentina takes steps to end crisis
24 Apr 02 | Americas
Argentina president in crisis talks
22 Apr 02 | Business
Argentina treads the tightrope
22 Apr 02 | Business
Argentina 'risks financial collapse'
20 Apr 02 | Business
Argentina closes all banks
26 Apr 02 | Business
Trade negotiator takes the helm
26 Apr 02 | Business
Argentina gets new economy chief
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