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Thursday, 13 December, 2001, 03:40 GMT
Argentina delays pension payments
Bank queue in Argentina
Pensioners were told to come back next week
By Tom Gibb in Buenos Aires

Argentina's government has had to postpone payments to 1.4 million pensioners because of a cash shortage caused by its mounting economic troubles.

Tens of thousands of senior citizens who turned up at the banks as usual to collect their pensions were sent away and told to come back next week.

My husband is not being paid his retirement benefits. It is shameless, what the government is doing to the Argentine people is a scandal

Buenos Aires resident

The government has promised to pay before Christmas, but before then it has a series of other payments to make on its $132bn debt.

News of the delay came as the country's main unions mounted street protests in preparation for a 24-hour general strike for Thursday.

Many pensioners reacted with disbelief and outrage. Some of them showed a few coins saying that was all they had to last them until Christmas.

There were also angry comments about the government continuing to make interest payments to international creditors on its debts while pensioners went hungry.

Minister of Economy Domingo Cavallo
Cavallo is under pressure to cut the budget deficit

The next week is expected to be crucial. The government has a series of major payments to make on its debt.

It has now been cut off by the International Monetary Fund, so it has not received $1.3bn of IMF aid it was counting on this month.

To get that aid restored the government needs to slash $4bn off next year's budget. The budget is expected to be announced in the next few days.

But the opposition-controlled congress is unlikely to go along with the cuts.

Argentina is now gearing up for a 24-hour strike by the largest two unions. While this is likely to close the country down, opinion polls show that most Argentines have as little faith in the unions as they do in their politicians.

So far seven taxis have been burned in Buenos Aires to put pressure on other drivers not to work during the strike.

The BBC's Tom Gibb
"The problem is the Government does not control the purse string"
See also:

10 Dec 01 | Business
Argentina in new bid to cut debts
06 Dec 01 | Business
IMF blocks loan to Argentina
03 Dec 01 | Business
Argentina curbs cash withdrawals
25 Nov 01 | Business
IMF spotlight on Argentina
03 Dec 01 | Americas
Fear of ruin haunts Argentines
11 Dec 01 | Business
Cavallo faces the end again
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