The World's Worst Job

How long will Roberto Lavagna last? That's what everyone in Buenos Aires is debating since Lavagna was sworn in on Apr. 27 as Argentina's sixth Economy Minister in a year. Lavagna, 60, ambassador to the European Union until summoned home urgently, got off to a reasonably good start in coping with Argentina's financial mess. First, he assured investors that Argentina would continue its new policy of allowing the peso to float freely against foreign currencies--contrary to statements by populist President Eduardo Duhalde, who hinted he would repeg the peso to the dollar. Then, on Apr. 29, calm prevailed as Lavagna reopened the banks and foreign-exchange markets after a weeklong holiday called to prevent financial collapse. The peso strengthened 7.4% against the dollar, and Argentines waited patiently to withdraw limited amounts from the banks.

But Lavagna now faces a huge hurdle. He must fashion a plan for bailing out the banks, which have been reeling since the government converted $60 billion in dollar-denominated deposits into devalued pesos in January. And he must hammer out details of a broad new agreement between Duhalde and 23 provincial governors to slash spending.

If Lavagna succeeds, he may be able to renew talks with the International Monetary Fund on a much-needed $9 billion rescue package. But Duhalde may refuse to preside over IMF-imposed austerity programs that could trigger a popular backlash. In that case, Lavagna would also be out. And Duhalde could find that his only remaining choice is to resign after calling new elections.

By Joshua Goodman in Buenos Aires

Edited by Rose Brady

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