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Friday, 26 April, 2002, 15:37 GMT 16:37 UK
Argentina gets new economy chief
Masked Argentine youth
The people want Mr Lavagna to deliver a quick fix
Argentina's President Eduardo Duhalde has named the free market economist Roberto Lavagna as his new economy minister.

Mr Lavagna will take up the post on Saturday, after flying back from Brussels where he was Argentina's ambassador to the EU.

Mr Lavagna will be the sixth Argentine economy minister in the last 12 months, taking over from Jorge Remes Lenicov who resigned on Tuesday.

His job of steering the country out of a desperate economic crisis will be keenly watched both by the Argentine people and by the international community.

Banking crisis

Four years of recession has left the Argentine economy in tatters.

Roberto Lavagna
Mr Lavagna's job to steer Argentina out of trouble will not be easy

Its banking and financial system is in disarray, its currency sharply devalued, and its people are now strapped for cash after panic withdrawals last week forced a nationwide bank holiday.

Limited banking services were set to resume on Friday, though most Argentines would still be denied access to their bank savings after the upper house of parliament passed a law which made it virtually impossible to withdraw cash.

Under the measure, only savers who mount successful legal challenges against existing restrictions on withdrawals will get access to their money, though the government will be able to appeal against court decissions.

Buying time

For Mr Lavagna such stalling techniques should buy him time to get on with the challenge of mollifying impatient international money lenders.

His main task will be to convince the IMF to restart a lending programme to Argentina, by pushing ahead with economic reforms which must include spending cuts by the country's provinces and legal reforms aimed at restoring investor confidence.

President Duhalde has already landed a cost cutting promise from the provinces and he has vowed to push ahead with legal reforms.

But on Thursday, he also said he would consider anchor the peso to the US dollar, just four months after the country abandoned a one-to-one peg with the US currency.

Such a move could alienate the IMF, at least if it was an all out move to a fixed exchange rate mechanism.

But if it stems soaring prices for basic goods like bread it could prevent street protests from escalating into repeats of the violent riots seen late last year.

The BBC's Tom Gibb
"The government will have a hard time"
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
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