Meanwhile, union actions and widespread street protests continue in response to the government’s austerity drive. Under IMF oversight the government has slashed 30 percent of spending for social programs as well as wages and pensions of state employees since the economy entered a downward economic spiral in late 1999.

The January 16 deal followed warnings by Argentine economy minister Roberto Lavagna. On January 15 he told the Inter-American Development Bank that there was no chance of the Argentine treasury making the due payment unless it received the rollover agreement from the IMF. As its part of the deal Buenos Aires agreed to fork out the $1 billion from its foreign currency reserves, and to reaffirm its commitment to the austerity drive it launched in response to the crisis.

Representatives of the G7 group of the seven largest imperialist powers--Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States--forced the January 15 deal through over the opposition of the IMF’s leading officials, reported the Financial Times. IMF managers had panicked over "the consequences of Argentina’s growing arrears for the credit ratings of the World Bank and the Inter-American Development Bank," noted the London-based daily.

The governments of Italy and Spain, added the Times, "also seemed to be particularly concerned about the potential risk to their investments in Argentina."

The editors of the big-business paper accused Buenos Aires of "blackmail" for its statements that default was inevitable without some assistance. A number of other big-business journals, including the Washington Post, took a similar view.  
 
2002: 12 percent decline in GDP
This latest development notwithstanding, the big-business press has lauded a modest upturn in economic activity in Argentina. Although gross domestic product slumped by nearly 12 percent in 2002, it recovered by an annual rate of 2 percent in November, reported Business Week, which described this as the "first year-over-year increase in 27 months."

In an economy that remains mired in crisis, it is working people who are hardest hit. Some 40 percent of the working age population is unemployed or underemployed, for example, while inflation rose 40 percent last year.

Under the impact of economic collapse and the weight of public and foreign debt, Argentina has already defaulted twice on loans owed to imperialist institutions and corporations.

In December 2001 the government of Fernando de la Rúa defaulted on interest and installment payments on $100 billion in bonds and loans. At the behest of the IMF, his administration had slashed the pensions and wages of state employees, raised taxes, and imposed a partial freeze on bank withdrawals. Massive protests greeted these moves, as workers and peasants blocked roads and organized street mobilizations. De la Rúa resigned in the face of these actions.

Eleven months later the new government of Eduardo Duhalde declared itself unable to pay $800 million in World Bank debt.

In January 2002 Duhalde ended the 10-year-old policy of pegging the Argentine peso to the dollar, precipitating a 70 percent devaluation. The buying power of the workers’ wages and the savings of retirees, shopkeepers, and others caved in.

Working people in Argentina continue to struggle against the impact of the sharply devalued peso, rising unemployment, and government cuts in social programs. In late January thousands marched in a two-day protest in Buenos Aires demanding increased benefits for the unemployed, wage increases to keep up with rising prices, and the defense of other social programs.

Organized by a coalition of forces including unemployed workers, retirees, and community organizations, they marched through the capital’s elegant neighborhoods to press their demands.

The caravan established an encampment at the Saavedra Bridge, and the following morning headed to the Venezuelan embassy to express solidarity with workers there who confront a nearly two-month long boss "strike" against the Hugo Chávez government. The marchers then proceeded to the U.S. embassy to denounce Washington’s war plans against Iraq.  
 
 
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