Buenos Aires, Argentina — Eduardo Duhalde, a veteran politician and critic of unbridled free-market economics, on Wednesday became Argentina's fifth president in two weeks as the country braced for the possible devaluation of its peso.
With the country in virtual bankruptcy, the 60-year-old stalwart of the Peronist Party's left-leaning, populist wing will have to work with international financial institutions to tackle the twin burdens of a restive public and a crushing $132 billion debt.
Supporters of new Argentine President Eduardo Duhalde celebrate outside Buenos Aires' Government Palace. Duhalde became Argentina's fifth president in two weeks Wednesday, pledging to ditch free-market policies that he said had left Argentina "without a peso."
The Buenos Aires stock market signaled approval as trading resumed Wednesday with the Merval index of shares climbing 9.6 percent at the close.
For the past decade the peso has been anchored one-to-one to the U.S. dollar, but local media reported Wednesday that the Central Bank was considering making the rate 1.4 pesos to the dollar.
Such a move would mark the beginning of peso devaluation across the economy, raising fears of a possible return to hyperinflationary chaos that gripped the economy in the 1980s.
Duhalde, a former vice president and two-term Peronist governor of powerful Buenos Aires province, donned the blue-and-white presidential sash after winning solid support in Congress to serve out ousted President Fernando de la Rua's mandate ending December 2003.
After a brief, subdued ceremony in the state rooms of the Casa Rosada government house, Duhalde immediately entered closed-door talks to form a cross-party cabinet that can push through a "program of national salvation."
Scant details were available, but Duhalde will need to move swiftly to prevent the insolvent country Argentina last week virtually declared bankruptcy by halting payments on its massive $132 billion public debt from sliding into anarchy and total economic collapse.
In a first sign Duhalde might have more staying power than fellow Peronist Adolfo Rodriguez Saa, who resigned abruptly Sunday after just a week in office, street protests that have flared almost daily in the capital subsided. Still, government buildings remained under heavy police guard.
First reports suggested Duhalde would place two Peronist heavyweights in key posts while seeking ways to devalue the peso, guarantee savers' bank deposits and mend fences with the International Monetary Fund.
Influential Buenos Aires Gov. Carlos Ruckauf was being eyed as foreign minister, while Jorge Remes Lenicov, an economist who is critical of free-market economics but has sound international contacts, was being sounded out as economy minister.
Speaking to Congress late Tuesday, Duhalde blamed unfettered free-market policies for crippling South America's second-largest economy and leaving it "without a peso."
But although some Argentines and Wall Street analysts said they feared a return to massive public spending and the hyperinflation of the 1980s, they expressed relief that Duhalde was a leader who looked durable.
"God willing, he will change something," said Jorge Baroldi, 52, a father of two who has been unemployed since 1996. "Things here are so very bad, we have to believe in somebody."
"Now's not the time for party politics, it's time to do something for the country," said Baroldi, leaving the Our Lady of Mercy church in Buenos Aires after praying "for all of us."
Argentina's country risk, as measured by J.P. Morgan's emerging market bond index, ticked down slightly but only to a still dizzying 4,296, meaning the country if it had access to international markets could only borrow money by paying a whopping 42.9 percent over the benchmark U.S. Treasury bond rate.
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