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Wednesday, 13 February, 2002, 12:58 GMT
Argentina crisis package: What do you think?
Argentina's devalued currency is to float freely for the first time in a decade after a week-long closure of the country's banks and currency markets.

The free float of the peso is part of a restructuring plan aimed at restoring economic and social stability to a country racked by economic crisis and bloody street protests since the former government defaulted on debt payments late last year.

Last week, Argentina abandoned a dual exchange rate mechanism which had been in place since early this year.

The change comes as part of a new emergency package aimed at pulling the country out of its worst economic crisis in decades.

The government hopes the measures will help it win up to $20bn (14bn) in additional aid from the International Monetary Fund.

What do you think of the new crisis package? Can the government secure IMF funds? If you're in Argentina, how will the measures affect you?

This Talking Point has now closed. Read a selection of your comments below.

I think the lack of liquidity in the Argentinean market is destroying the economy and the middle class. Many rich Argentineans had transferred their financial assets to the USA when selling their companies to US and European firms. This means these assets are no longer supporting the Argentinean economy. It is imperative that Argentina and the world community ensure these assets are repatriated and they once again become part of the Argentinean economy. In addition there appears to be a lot of noise about hundreds of millions maybe billions that have been taken in payoffs and deposited offshore by politicians. The Swiss and Caribbean offshore entities should come clean on this one. The people need and deserve their liquidity. The corrupt deserve what should be coming to them.
Paul M, USA

Argentina's strategy is aimed at securing IMF funds as a stop-gap means of quelling civil unrest. IMF compliance will be akin to rewarding a child for throwing a tantrum when he's eaten all his sweets and wants some more. If - as history indicates - Argentina is unable to behave responsibly with borrowed resources, then those responsible for IMF disbursements should refuse Argentina's request. If Argentina secures further IMF funding her long-term problems will be compounded. In other words - when you're in a hole, stop digging. The country's financial difficulties have been caused by political mismanagement of financial resources. The solution is to put in place a government which is interested in running Argentina in an intelligent and responsible manner. Injections of more outside funds will merely finance further mismanagement and corruption, and will add fuel to Argentina's difficulties.
Chris B, England

Our dreams here have been stolen

Danny Kiersz,
I feel extremely bad. I was born in Argentina 42 years ago and am a marketing consultant in the dentistry field. My father came from Poland in 1923 and I am now leaving Argentina. Our dreams here have been stolen and probably, we the people, in some degree are guilty too.
Danny Kiersz, Argentina

The secret to getting back on track is revamping the system with all brand new policy making. Trying to fix problems through patchwork will not be as effective as starting with a clean slate.
Jason Lee, USA

This tactic is clearly no more than a stop-gap solution aimed at short term reduction of civil unrest. It could be reasonably argued that it was Argentina's securing of unserviceable IMF loans that precipitated Argentina's financial downfall in the first place. Borrowing yet more funds might briefly disguise the true situation - but is the financial equivalent of a drug addict's "fix". In other words: things might look better temporarily, but the trade-off will be a grimmer long-term prognosis with a diminished chance of a clean recovery.
Chris B, England

The outside world will no longer sustain a system that spends far more than it earns

Mark, USA
For decades the government of Argentina pursued policies that drove it to financial ruin. The outside world will no longer sustain a system that spends far more than it earns. Unless and until Argentina re-establishes itself on a firm financial footing, its crises and misery will never come to an end.
Mark, USA

Where was the world last October and November when there were floods in Argentina? A good part of their GNP is based on agriculture and the land was under water. How do you expect to pay when there is nothing to pay with and how much has been taken out of the country by those who invested in the country. The sum of $140 Billion just does not disappear. Maybe the rest of the world should try to find out where that $140 billion is and who put it there!
Joe Leonituk, Canada

I am a professional and I feel very bad. I don't trust in Argentina's lack of justice - where 50%of population is illiterate due to the mediocrity and lack of professionalism of our politicians. President Duhalde said "Argentina is in bankruptcy, but he didn't say that they - the politicians - bear the main responsibility for this unfair and irreversible situation. He raised the wages of the deputies, and they continue having privileges and because of this the clashes will continue. Everyone who is able to is trying to emigrate.
Patricia B, Argentina

Temporary rescue plans to shore up fatal financial deficits aren't really the way forward.

Simon Cameron, UK
When a system becomes entirely self-serving it signs its own death warrant. We only have to look at the history of fallen empires to confirm this. The present fiasco in Argentina is but another sign of our lamentably defective socio-political order. We neither practise what we preach nor dare we promote the values that we practise. Temporary rescue plans to shore up fatal financial deficits aren't really the way forward. Nothing less that a complete re-evaluation of our behavioural norms and moral conduct will suffice to eliminate the specter of social and economic catastrophe, not just in Argentina but everywhere on the planet. I believe a culture of genuine accountability can be introduced in Argentina, and I suggest the IMF spends its money to research how this might be achieved before it throws good money after bad.
Simon Cameron, UK

It would be alright for a country to legislate concerning new business, but changing the rules on previously entered into monetary transactions after the fact seems worse than unacceptable. As I understand it, if you entered into a US dollar or UK pound transaction with a bank in Argentina, you would now find that you no longer own or are dealing in those currencies, but are now dealing in pesos, whose valuation is questionable. I cannot see that anyone in the world would want to deal with such a regime, that meddles in that way in the free trade of currencies and investments. Far from being a suitable corrective action, the actions lead to a loss of confidence as to Argentina's fiscal credibility.
Robert Morpheal, Canada

See also:

04 Feb 02 | Business
Argentina unveils crisis package
30 Jan 02 | Business
IMF tells Argentina to cut spending
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