Argentina to take over pensions

[dipsydoodle]

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.

http://news.bbc.co.uk/1/hi/business/7682877.stm

[Judi Lynn]

1. Argentine pension plan has local, global impact

Argentine pension plan has local, global impact
By Fiona Ortiz – 27 mins ago

BUENOS AIRES (Reuters) – Argentina's surprise plan to nationalize its private pension system caused chaos on local markets on Wednesday and raised fears about a debt default, sending a ripple effect of fear about emerging-market investments into European stocks and Asian bonds.

President Cristina Fernandez, who has repeatedly criticized financial markets for speculating rather than investing in real production, announced on Tuesday she would send a bill to Congress for the state to take over the $30 billion in funds in the 14-year-old private pension system.

Fernandez defended the plan by saying that she was rescuing pensions from the global market crisis but some investors saw the plan as a sign of desperation by a government facing billions of dollars in debt obligations next year.

The plan is likely to pass Congress and be broadly popular in Argentina, where there is broad-based suspicion of the privatizations that took place during the 1990s when free-market reforms swept Latin America.

More:
http://news.yahoo.com/s/nm/20081022/wl_nm/us_argentina_pensions_wrap