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Thursday, 25 April, 2002, 14:26 GMT 15:26 UK
Argentina takes steps to end crisis
Demonstrators argue with police officers near Buenos Aires Congress on Wednesday
Congress is meeting to rush in a law to allow banks to reopen by Friday
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By Tom Gibb
BBC South America correspondent

Argentina's President Eduardo Duhalde has said that his country's only way out of its worst economic crisis is to live up to its international agreements and continue seeking help from the International Monetary Fund (IMF).

Argentine President Eduardo Duhalde
Duhalde: Argentina has to reintegrate with the rest of the world
He was talking after signing what some are describing as a landmark agreement with the country's powerful provincial governors to undertake reforms demanded by the IMF to qualify for a bail out.

This follows a week of crisis, with the banks closed and the resignation of the Economy Minister, Jorge Remes Lenicov.

Congress is meeting to rush in an emergency law that will allow the banks to reopen by Friday.

After signing the formal agreement with the governors, President Duhalde said that Argentina had to try to reintegrate with the rest of the world.


He promised that the country would pay its debts and continue to seek help from the IMF, which cut Argentina off last year.

A woman demonstrator
The closing of the banks has been a nightmare for many
The agreement commits the highly autonomous provinces to reduce spending, one of the principle conditions being placed by the IMF.

It also gives a timetable for other reforms.

In particular it contains a promise to resolve the problem of the country's near bankrupt financial system within 30 days.

This week the banks have been closed, leading to a nightmare for many Argentines desperate to get cash to buy food.

Jorge Remes Lenicov
The steps follow Lenicov's resignation
One old age pensioner collapsed and died after being sent running from bank to bank to try to get his pension.

In one suburb pensions were being given out in a gymnasium - in another, in a baker's shop.

Despite promises that they would get their money, many pensioners went home empty handed.

Extremely difficult

Congress is now passing a law called the "Anti Drip Law" to make it harder for people to get court orders to take all their savings out of the banks.

This should allow banks to reopen on Friday without leading to a collapse of the financial system.

But it will only buy a few weeks for the politicians to come up with more definitive answers.

Both President Duhalde and the provincial governors are saying that the agreement they have signed represents a landmark for Argentina.

But others point out that so far it is only a declaration of intent.

With protests against austerity measures across the country, it may be extremely difficult to turn it into reality.

Professor Steve Hanke, John Hopkins University
"The only thing they can do is get rid of the central bank completely and only use the US dollar"
The BBC's Tom Gibb
"The latest crisis was provoked because the banks almost ran out of money"
See also:

22 Apr 02 | Business
Argentina treads the tightrope
22 Apr 02 | Business
Argentina 'risks financial collapse'
22 Apr 02 | Americas
IMF says Argentina could get aid
20 Apr 02 | Business
Argentina closes all banks
18 Apr 02 | Business
Argentina pleads for financial aid
05 Apr 02 | Business
IMF 'to ignore' Argentina cash plea
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