Argentina's President Cristina Fernandez has signed a bill that will nationalise the country's 10 private pension funds.
The move will put the government in control of almost $30bn (£18bn) of investments and is aimed at protecting them from the global market turmoil.
Shares slumped amid fears of the move's impact and critics accused the government of trying to grab the funds.
The bill needs the backing of Congress, where the ruling party has a majority.
Argentina's pension funds were struggling with corruption and the country of Argentina was struggling to make payments on its own debts. This move was supposed to calm the panic setting in on the country.
So, how has the move been seen in the country? The Argentine stock market has spoken.
THE main stock index in Argentina plunged more than 16 per cent overnight, after the president announced plans to nationalise private pension funds. Markets also fell 11 per cent on Tuesday.
President Christina Kirchner moved to nationalise $US30 billion ($A44.3 billion) in private pension funds yesterday, saying it was necessary to protect retirees in the global financial crisis.
Some analysts saw the move as a tactic by the government to get hold of cash to help service the national debt of some $US150 billion ($A221.5 billion). Argentina defaulted on its debt in 2001.
In fact, the market has lost more than a quarter of its value only four days prior. Rather than calming the market, this bold government intervention has only put them into more of a panic.
There is of course a bit of cruel irony in a third world government with a long history of its own corruption attempting to nationalize an industry in order to root out corruption. Maybe, that's one reason why the market has responded as it has. Furthermore, maybe just maybe, the markets know better than bureaucrats and policy makers. No matter how dire the situation Socialization and nationalization isn't the way to go. The government which intended to help only made things worse and once again Ronald Reagan was right
the nine most terrifying words in the English language are 'I'm from the government and I'm here to help'
...
1 comment:
The Argentine government once more had showed us that there are no limits to their goals, total power and the destruction of what remains of our democracy. The Kirchner couple ruled the country with a complete contempt for our Constitution, first they tried to smashed the agriculture sector, with completely disproportionate export taxes, which they provoked a paralysis in our international trade. They were defeated in the Congress on July 17 when they tried to assume extraordinary powers on this regard. But they are using now the international crisis to confiscate the savings of some 10 million of Argentines, which are worth more or less some 40 billion dollars.
We are completely horrified with this new move; we thought that they had learned something after their setback last July. Disgracefully they want more cash to "buy wills", which means use our money to dominate the political scenario and remain in power beyond 2011, when Cristina Kirchner should hand over her office to a new elected president, probably if the opposition is not united, for our disgrace would be her husband Nestor Kirchner who will be back "in office". So a real absolute monarchy is replacing our republic step by step.
This government is taking now all of our entire life savings without any compensation, but we will fight in the courts and even in international courts if necessary. They still have deposited in Switzerland some 2 billion dollars, which belong to the State of Santa Cruz, the province ruled in a quite open authoritarian way by this couple of crooks for 15 years. The Argentine Constitution establishes on Article 17. Property is inviolable, and no inhabitant of the Nation can be deprived thereof except by virtue of a judgment supported by law. The confiscation of property is stricken out forever from the Argentine Penal Code. It is crystal clear according with law that there aim is to confiscate our savings once more, which as I quoted is completely forbbiden in our legal system.
The Government had asked once again to the Congress that they need "Extraordinary powers" the Constitution is quite clear on this regard when it determines "Article 29. Congress may not confer on the National Executive extraordinary powers, or the whole of the public authority, nor grant them acts of submission or supremacy whereby the property of Argentines will be at the mercy of governments. Acts of this nature shall be utterly void, and shall render those who formulate, consent to or sign them liable to be called to account and punished as infamous traitors to the country". Our congressmen and women should think twice before grant these powers to the Kirchners Our country which used to be one of the most advanced in the whole world from 1850 to 1946 (when Peron was elected), is still a great promise awaiting for a decent leadership that should rescue us from abyss. By the way, Mrs. Kirchner will travel to Europe soon; probably she will continue her "traditional shopping" in Paris at Louis Vuitton, Hermes, Dior at Avenue Montaigne, and Gucci with our moneys and our resources. I hope that nobody will receive her, she doesn't deserve to be treated as a head of state, like Robert Mugabe, Mrs Kirchner and her husband "King Nestor" are just demolishers of democracies and freedoms.
Post a Comment