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Argentine plan fuels debt fears
Bill Condie, Evening Standard22 Oct 2008
ARGENTINA'S plan to nationalise nearly $30 billion (£18.16 billion) in private pension funds, including those of HSBC, has sparked fears the country could be heading for another debt default its second in 10 years.
President Cristina Fernandez proposed a funds takeover, saying retirees must be protected from the global financial crisis.
Her announcement sent markets into a spiral. While she says it is to protect retirees' savings, critics say the government is looting pension funds ahead of a tough budget year.
Argentine bond yields soared above 24% and the benchmark Merval stock index tumbled 11%.
Argentina's borrowing needs will swell to as much as $14 billion next year, from $7 billion in 2008, according to RBC Capital Markets.
Argentina has had no access to international capital markets since its 2001 debt default.
