Argentina's Govt. Pushes Through Social Reforms for IMF Money

December 31, 2000 - 0:0
BUENOS AIRES The administration of Argentine President Fernando de la Rua on Friday ordered several controversial reforms, including the deregulation of social security and pensions, to secure International Monetary Fund money to help the country out of a financial crisis.

The government also used its veto power to stop Parliament's attempt to compensate public sector workers who have undergone wage cuts.

At the same time, the administration decided on a spending program aimed at improving the country's infrastructure and decreasing unemployment. It is expected to cost an estimated 20.5 billion pesos ($20.5 billion) over the next five years.

Argentina's unemployment rate stands at more than 15 percent as the country suffers under an economic crisis that began in 1999.

Part of Friday's measures were needed to fulfill conditions set by the International Monetary Fund and other money lenders to send nearly 40 billion dollars in standby credit to Argentina.

The money is being called "financial armor" because it is hoped it will restore the financial world's confidence in Argentina and its ability to pay its debts. This stronger financial image would then, in turn, decrease the country's interest rate payments.

The reforms to allow more private competition in social security and pension programs - which were made by decree - were not only encountering strong opposition from the peronist opposition and unions but also caused tension within the ruling coalition.

De la Rua's junior partner, the left-leaning Frepaso, strongly disapproved of the measure. (DPA)