- BUENOS AIRES - Argentine officials were bracing for a new run
on the banks late Friday, after a top court ruled the government's freeze
on savings accounts is unconstitutional.
- Argentinian President Eduardo DuhaldeThe
government immediately declared next Monday and Tuesday will be bank holidays
a move that's sure to further infuriate Argentinians who've seen the
value of their savings halved in the past two weeks by a plummeting peso.
- In a wave of panic withdrawals late last
fall, $1 billion US left the system in just one day, plunging the economically
troubled nation even further into recession. That run forced then-president
Fernando de la Rua to impose the bank freeze. It led to massive, often
violent, street protests that left 27 people dead and forced de le Rua
- New protests broke out around the country
Friday, fueled by popular rage at current President Eduardo Duhalde's inability
to shake the country out of recession, and live up to his promise to ease
the hated banking restrictions.
- But what Duhalde had seemed reluctant
to do, the Supreme Court did for him Friday, ruling six to three against
the freeze. And suddenly, it was the bankers who were panicking: Analysts
said Friday the country's banks already teetering under four years of
recession simply don't have enough money to repay all their customers
and could face ruin, sending the country even deeper into recession.
- Later Friday, Duhalde the country's
fifth president since mid-December said he disagreed with the ruling.
Legal experts were still wrangling Friday over its meaning, with some
contending that it applies only to the five original plaintiffs. Most
though, said it freed the money of all depositors.
- Banks have been further weakened in recent
weeks by Duhalde's decisions to float the peso, traditionally pegged to
the U.S. dollar, and default on Argentina's public debt.
- Those decisions have done little to stem
the economic downturn. But they have angered and alienated foreign investors.
The International Monetary Fund has said no aid package will be put together
for the country until Duhalde comes up with a sustainable economic plan.
- On Saturday he was to have presented
those reforms, which were expected to strike a delicate balance between
appeasing an angry populace with tax cuts, and foreign investors with
a realistic debt repayment plan.
- Duhalde postponed that unveiling late
Friday, after the court's ruling.
- Written by CBC News Online staff