Argentina nationalizing pension system
Workers polish the back doors of Argentina's Central Bank in Buenos Aires
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Renita Jablonski: Onto another example of nervousness. Argentina's leftist government announced late yesterday it was nationalizing the country's private pension system. Argentine bond yields skyrocketed, while the local stock market plummeted 11 percent to its lowest level in four years. From the Americas Desk at WLRN, Marketplace's Dan Grech reports.
Dan Grech: Argentina's private pensions are somewhat like 401K accounts in the U.S. Three million Argentines pay $5 billion into the system each year. Argentina says it's taking over the pension system to protect workers from losses due to declines in global markets.
Business journalist Julieta Tarres is with the Argentine paper Cronica. She says really, the Argentine government is strapped for cash and faces mounting debts.
Julieta Tarres (voice of interpreter): Exports are declining and commodity prices are falling, and the government won't collect the taxes they did in years past. They don't have any other place to find money.
Back in 2001, Argentina defaulted on $95 billion in bonds, the largest sovereign-debt default ever. Since then, no one in the international credit markets has been willing to lend to Argentina. The pension takeover is expected to be approved in the coming days by Argentina's Congress.
I'm Dan Grech for Marketplace.