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World at One Thursday, 20 December, 2001, 12:40 GMT
Argentina erupts into chaos
Looters in supermarket in Argentina
Looters in supermarket
A state of emergency has been declared in Argentina, provoked by rioting and looting, deep recession, the resignation of the economics minister, a collapsing currency and a run on the banks.

Argentina is waking to a day of political and economic uncertainty - the country has been here before. President Fernando de la Rua has no palatable choices.

A new austerity budget, or cutting public spending still further might help to stem the crisis, but either would certainly provoke further outrage from a population which has seen wide scale job-losses and a brutal assault on the value of its savings and pensions.

If the budget cannot be agreed, the International Monetary Fund may withdraw its support, hastening economic meltdown and political crisis.

Jeffrey Sachs, the director of the center for international development at Harvard University, Michael Valdes Scott, the director of Canning House Ltd and Celia Szusterman, the director of the Argentine studies programme at the University of Oxford discuss the likely political and economic impact of the crisis.

Tanzania

The government seems determined to press ahead with an export licence for a military air traffic control system for Tanzania - despite the evident objections of Gordon Brown, and Clare Short.

Ms Short has given no public statements on the subject, but she made her views perfectly clear in the Commons yesterday, during International Development questions, when she appeared to agree with Labour MP, Glenda Jackson, who came on the programme to condemn the idea.

Lloyd's

Lloyd's of London, one of the pillars of the City's financial system, faces a strong - and potentially expensive - challenge from the EC. And it is a challenge that calls into question the very basis on which Lloyd's operates.

After a two-year investigation, the Commission has demanded proof that Lloyd's is in a position to meet its possible obligations, as required by a European directive of 1973. The organisation works on the basis that its names - rich individuals - and reinsurance companies, agree to pay up when required.

However, under the directive, regulators are supposed to certify that there enough assets to cover all liabilities, and, in the case of Lloyd's, it continued to declare profits when faced with open-ended liabilities, for instance on asbestosis claims.

The EU has been meeting this morning to discuss launching proceedings against the British government - and many of those who have lost fortunes in recent years will be watching these developments with great interest, in the hope that it may help their compensation claims.

MEP Roy Perry explained what will happen next.


To listen to the interviews, click on the links above

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 ON THIS STORY
Jeffrey Sachs, Michael Valdez Scott,Celia Szusterman
Reactions to the crisis in Argentina
Glenda Jackson:
"This (the military air control sale) is an absurd idea"
Roy Perry :
The EU's next step over Lloyd's
Links to more World at One stories are at the foot of the page.


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