8 de septiembre 2008 - 00:00

Under pressure, Argentine gov't defines plan against inflation and debt.

Trouble comes from two different angles. On one hand, the international context, with soy price declining on a daily basis. On the other hand, the need for funds to pay debts due in 2009 and 2010. The Bicentenary is not far away and, if the economy's direction is not changed soon, there will be no reasons to celebrate.

That is why officials are stealthily trying to give the necessary steps towards having access to credit markets again some day (although today that seems too far away). The Paris Club move shows that is not enough. The government is already contacting bankers to carry out a debt swap guaranteed by new pesos-denominated bonds. Four billion dollars due in 2009 will be settled with this transaction. The Argentine government is also willing to reach an agreement with bondholders who were not part of 2005 debt swap. Inflation also forces to make some corrections.

There is already a plan to postpone meetings between employers and employees until June 2009. As compensation, the government might increase the fixed wage sum by the end of the year. These are initiatives launched by different government areas. As it was already anticipated, government will announce a gas rate hike, presumably before the end of the month. The fiscal situation also forces government to learn self-discipline and cut down the subsidy festival. But not everything goes in the same direction. Government insists on manipulating figures. On Wednesday, it will announce an inflation rate of 0.6 per cent that will put pressure on Argentine bonds once again. Subsidy savings due to electricity rate hikes are spent in rescuing Aerolíneas Argentinas and Austral. Although there seems to be a lot of time, this is actually untrue, and that is why government is making all these moves.

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