Argentina to restructure debt

Agence France Presse Buenos Aires

Argentina is to restructure its debt in an effort to save four billion dollars in 2002, President Fernando de la Rua announced Thursday.

Argentina's sixth economic package since March, aimed at tackling a severe economic crisis after 41 months of recession, proposes an "orderly restructuring" of the nation's debt.

"The government is proposing to reduce the incidence of debt and interest," De la Rua said in a speech to the nation from government headquarters.

Economy Minister Domingo Cavallo said that the debt restructuring would be performed by issuing new bonds at a rate of seven percent. That would lead to "at least four billion dollars in savings" next year, Cavallo said.

The president also announced measures to reactivate the economy and boost consumer spending. Those include a five-percent cut in value-added-tax for credit card purchases, and a three- percent cut for debit card purchases.

The government is also to launch a "revolutionary" social security program, De la Rua said.

All Argentine families will come under the program, as well as unregistered workers, according to his Social Security Minister Patricia Bullrich, who outlined details of the program to a gathering of economists and business leaders shortly before De la Rua's speech.

Bullrich said that "a million children, the elderly and adolescents, unregistered and farm workers" would benefit from the program, to come into effect January.

People aged over 75 will receive 100 pesos a month in state aid, and the government is to create a new social security card for payments to be received via banks, she said during a meeting at Banco Nacion.