Argentina's centre-left President Cristina Fernandez on Tuesday signed a bill for a government take-over of the $30 billion private pension system in a daring and unexpected move that rocked domestic markets. Labour leaders and lawmakers from the ruling Peronist party and some opposition groups applauded the nationalisation as a way to guarantee pensions at a time of global market turmoil.
But the surprise move unnerved investors and sent Argentine stock and bond prices into freefall. Critics said the government was looting pension funds ahead of a tough budget year when it has to find billions of dollars to pay and service debt, but the president said the private pension fund administrators were the looters.
"These were looting policies," Fernandez said of the private system in a ceremony at the government's National Social Security Administration, or ANSES, which will take over the pensions. Congress, which is controlled by Fernandez allies, will debate the bill next week. "The failed experiment" of private pensions is finished, ANSES Director Amado Boudou said at the ceremony with Fernandez, before hundreds of political supporters.
Comments
Comments are closed.