20 de diciembre 2000 - 00:00

Positive: The country went back to the level prior to the financial crisis. Negative: it is believed that the bailout is only a temporary safeguard.

· The country risk reached a level below 700 points, this did not happen since October 10th. This is positive.
· Anyway, the country risk is 100 points over the level it had reached when the Alliance party came into office.

· For the time being there is only short-term investment in the markets. There is still a steady rise in Argentinean short-term public securities. But the increase in long-term securities is not stable.

· This may mean that people still believe that the rescue package only covers next years' s dues, especially the first six months, but doubt whether the present administration will make the economy grow, especially if it will get back foreign private credit and investments as current long-term interest rates turn Argentina into a non-viable country.

· Private productive sector will have to make U$S 8 billion corporate bond renewal at these rates. This is the determining factor to come out of the recession.

· If the government spends more than U$S 10billion from the package, the country risk will increase again. Brazil used only 7.5 billion from its 43 billion bailout and paid off the money spent three years after. The package brings about trust in Argentina. But the more money is used, the less confidence there will be. ¿What will happen?

· An encouraging news: the amount of money to be spent will not be discussed for the time being.

· Another encouraging news: none of the other four countries which were delivered a package (Mexico, Russia, Korea and Brazil) failed to come out of the crisis. ¿Why should Argentina fail? It would be the end of the Alliance party. It is not believed that this will happen, but securities' purchase show that there are doubts.

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