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Sunday, 23 December, 2001, 13:08 GMT
Argentina to halt debt payments
Unemployed people wait to receive food from a soup kitchen in Rosario
Economic crisis has pushed unemployment to 18%
Argentina's newly installed interim president has announced the country will suspend its foreign debt payments, triggering the biggest debt default in history.

Adolfo Rodriguez Saa, a 54-year-old provincial governor appointed to serve as replacement president until elections on 3 March, made the announcement to Congress immediately after being confirmed in office.

Adolfo Rodriguez Saa
Mr Rodriguez Saa says his priority will be the people
The country currently has $132bn of debt which will be affected.

Mr Rodriguez Saa said he was taking power "in one of the most difficult and dramatic contexts".

He said the riots which last week led to at least 25 deaths showed the need for a "new style of government" which represented all Argentinians, especially the poor.

He announced plans to create jobs to combat unemployment, now at 18%, as well as to distribute emergency food supplies to the needy.

He also said his salary as president would be capped.

The new government has said it will not devalue the peso or end its peg to the US dollar.


YOUR COMMENTS

If only the name of our president changes and not the course of our economy, then we will have lots more days like 20 December

Carlos Carpaneto, Argentina


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Mr Rodriguez Saa was put forward for the interim presidency by the trade union-backed Peronist Party, which has a majority in both houses of Congress.

But opposition parties and some Peronists were unhappy about the rules for the elections, and Mr Rodriguez Saa's approval, which had been expected on Saturday, was delayed all night.

Argentina Congress
Congress kept talking all night
Mr Rodriguez Saa's appointment restores the Peronists - Argentina's largest party - to the presidency for the first time since Carlos Menem left office in 1999.

Analysts blame mistakes made during Mr Menem's 10-year spell in office for many of the current economic problems, including unemployment at 18% and uncompetitive industries.

Mr Rodriguez Saa will hold office until his successor, chosen at the March elections, can take power on 5 April.

Political doubts

That person would serve out the two years that remain of Mr de la Rua's term in office, after which there would be further elections.

Other parties questioned whether the proposed arrangements were constitutional.

Peronist party leaders are pressing for a complicated electoral system which allows each party to field several candidates for the presidency - then pool the votes cast.

Our correspondent in Buenos Aires, Tom Gibb, says this is essentially because of the rival ambitions within the Peronist party and the lack of time to hold primaries.



CRISIS UNFOLDS:

Wednesday

  • Widespread looting in Buenos Aires
    Thursday
  • Protests spread to Cordoba, Mendoza and Rosario
  • President de la Rua resigns
    Saturday
  • Adolfo Rodriguez Saa nominated interim president
  • Congress begins debating election rules
    Sunday
  • Rodriguez Saa nomination confirmed

    Argentina timeline

  • Opposition parties say the instability of an electoral campaign is the last thing that Argentina needs in the middle of the worst social and economic crisis in its history.

    US President George W Bush has urged the country's new leader to push through an austerity programme proposed by the International Monetary Fund.

    But after a four-year recession, there is unlikely to be much public support for IMF-approved measures.

    Our correspondent says Argentina's big problem with its currency is that many ordinary Argentines have mortgages and other debts in dollars, as do businesses and farms.

    But they earn money in pesos, so any move to devalue the currency would only increase the size of their dollar debts.

     WATCH/LISTEN
     ON THIS STORY
    The BBC's Richard Fabb
    "An untidy end to a turbulant week"
    See also:

    21 Dec 01 | Business
    Bush backs IMF austerity measures
    21 Dec 01 | Business
    Argentines wait for new policy
    13 Dec 01 | Americas
    Argentina delays pension payments
    22 Dec 01 | Americas
    Viewpoint: There is no future here
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