Furor over financial freeze; Argentine rioters hit scattered banks

Wednesday, January 16th 2002, 12:00 am
By: News On 6

BUENOS AIRES, Argentina (AP) _ Popular fury over stringent banking restrictions has boiled over as enraged Argentines stormed banks and destroyed cash machines to protest the government restrictions penning up their savings.

The rising anger came as President Eduardo Duhalde promised to ease the 6-week-old banking freeze first imposed by Fernando de la Rua last month to stem a run on the banks that threatened the country's fragile banking system.

But the widespread anger was evidence that social tensions are still running high in this troubled South American country, the region's second-largest economy.

In three cities in Argentina's interior, hundreds of Argentines ransacked banks, ripping out computers and smashing windows _ including at international banks like Citibank and BankBoston.

``I put my money in the bank as a safeguard, not to have it confiscated by crooked politicians who've dug us in this hole,'' said Sergio Alcon, a 36-year-old dentist, marching alongside thousands of small business owners and real-estate agents protesting the banking freeze in Buenos Aires.

Many complained that the deep restrictions had paralyzed their businesses, and they called on the government to free up people's access to their money to get the economy moving again.

Thousands of jobless Argentines joined the scattered protests Tuesday, demanding jobs and calling on the nearly bankrupt government to bolster social programs at a time when nearly one in five Argentines is without work.

But it was the banks that felt the brunt of the social discontent on Tuesday. The banking freeze triggered deadly street riots last month that forced Fernando de la Rua to resign. Duhalde, meanwhile, has called them a ``time bomb that will explode if we don't carefully dismantle it.''

After taking office as Argentina's fifth president in a month, Duhalde further tightened access to dollar accounts last week. Argentines hold $46 billion, or 72 percent of all deposits, in such accounts.

The limits mean Argentines who have their wages directly deposited in banks can only withdraw 1,500 pesos monthly _ now about $1,070 dollars. Those with ordinary checking accounts can withdraw 1,200 pesos monthly, or $850.

In the central province of Santa Fe, some 7,000 demonstrators took to the streets of the city of Casilda, hurling eggs at the banks. Riot police responded with tear gas and rubber bullets. A small core of violent protesters threw rocks through bank windows, set fires and vandalized ATM machines.

Argentines also unleashed their anger at banks in the cities of La Plata, where they set fire to ATM machines, and in Salvador de Jujuy, where they ripped out computers, trashed offices and smashed windows in three bank branches, including Citibank and BankBoston outlets.

Duhalde likened the deteriorating social situation to a ``depression.''

``We feel like we are in a swamp,'' he said. ``And we still don't know if we've hit bottom yet. This country seems to be sinking _ but not because of a great accident like the Titanic, but because everything is a mess.''

Duhalde said the restrictions are meant to protect regular Argentines, not just the banks.

``The people can believe that we are defending the banks, but we are defending the savings of the people,'' he said.

The International Monetary Fund closed off the spigot of bailout funds last month, leaving the country to default and devalue the peso, which for nearly 11 years was pegged one-to-one with the dollar.

A fact-finding IMF mission is in Buenos Aires. But Duhalde has said Argentina would only seek emergency funds once it has developed a clear economic program to rescue the country from four years of recession.

``We will go with our own plan, our own project, our own model, which we believe foreign lenders will agree to,'' Duhalde said after a top Economy Ministry official berated the IMF this past weekend for its criticism of Argentine economic policies.

Among the new steps, Duhalde said, would be a move to float the peso on the open market within five months. The peso is now set to an official rate of 1.40 pesos to the dollar, but mainly for foreign trade. For ordinary Argentines, the peso on the open market floats, hovering at 1.90 to the dollar.