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CNN Live At Daybreak

Argentina Devalues Peso As President Gets New Powers

Aired January 07, 2002 - 05:38   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Argentina's economic mess has just gotten messier. The country's finance minister devalued its currency today. One peso can no longer buy one dollar. It is a bold move designed to help the country recover, and it comes as lawmakers grant Argentina's president new powers.

CNN's Lucia Newman brings us up to date from Buenos Aires.

(BEGIN VIDEOTAPE)

LUCIA NEWMAN, CNN CORRESPONDENT (voice-over): It took two days and nights of intense negotiations, but at last, Argentina's president got the emergency powers he sought from the legislative assembly to implement his economic recovery plan.

Minutes later, economic minister, Jorge Remes Lenicov, called on Argentines to have confidence, and the rest of the world to have patience and understanding with a country that's broke.

"There are no miracles," he said. "I wish I could announce things that sound lovely. These measures, though, are the only ones possible. They will take us to where we want to go. And in the next few months, they will allow us to begin to see positive results."

The government says it will do all it can to soften the blow for Argentina's poorest citizens, as well as respect the savings of the middle class, which are currently frozen in the banking system.

In three weeks, the government plans to take a new austere and balanced budget to Washington. "A sustainable economic plan," says the economic minister, "which will convince the multilateral lending institutions to give more money to Argentina."

"We're going to ask for as much as we need to take us out of this hole we're in," he says. "It could be $15 or $20 billion, but this is something we still haven't fully discussed."

Security around the Congress and the presidential palace was tightened as the government prepared to announce the economic plan.

(on camera): But while many of the new measures are clearly unpopular, there's been no repetition of the type of protests that led to the resignation of two other presidents in the last three weeks. Clearly, Argentines are still trying to decide whether they should give this government the benefit of the doubt.

Lucia Newman, CNN, Buenos Aires.

(END VIDEOTAPE)

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