July 19 2002

Argentines Bang Drums Against U.S. Banks

By Daniel Kurtz-Phelan

BUENOS AIRES— A middle-aged woman desperately pounds on the heavily fortified, graffiti-covered steel doors of the downtown Bank of Boston. It is 12:30 p.m., and the unemployed shopkeeper is demanding the return of her $1,356 in savings, which has been locked inside the bank since Argentina descended into financial ruin and social chaos last December.

“My entire family has nothing to eat now because they depended on me and all my money is in the Bank of Boston,” shouts Argelia del Valle Cruz. “To the heads of the bank, I say, ‘Have a little bit of humanity, a little consideration for fellow human beings who cannot eat.’”

Del Valle Cruz is typical of the thousands who protest regularly now in the streets of this capital. They are ordinary middle class and lower middle class citizens, but together form a growing and adamantine force facing down the shaky government. Del Valle Cruz, for instance, is in the streets three times a week despite her description of a police beating she endured in April. In June, four officers hunted down and killed two demonstrators on the platform of a Buenos Aires train station. Protests continue and the air is feeling more dangerous as tempers flare. Still, every Monday, Wednesday, and Friday, Mrs. del Valle Cruz doggedly arrives at noon to picket banks and walk in the lead of a pot-banging procession of hundreds down a crowded pedestrian mall.

Their message is simple: “We want our money back.” Since December’s financial collapse, the lifetime savings of millions of Argentines have been frozen under government-enforced banking curbs, collectively referred to as the corralito — a Spanish word for playpen or corral — leaving funds untouchable. Meanwhile, unemployment spirals towards 30 percent and millions of families find themselves unable to afford even basic necessities. Television images of starvation on the outskirts of Buenos Aires haunt the nation, starkly marking just how far Argentina has fallen.

Recently the embattled government of President Eduardo Duhalde announced a plan under which depositors can swap savings for government bonds redeemable in pesos or dollars, in three, five, or 10 years. But few show interest. Demonstrators denounce the bond plan as a trick cooked up by politicians and bankers to transfer the state’s massive debt onto the backs of savers. Repayment of the national debt becomes less and less likely as the government`s cash reserves plummet.

Jorge, an accountant in his sixties, waves a sign proclaiming “No to Fraud, No to Bonds.” He likens the bonds to checks written by someone on an account with insufficient funds: they’ll bounce.

“The bonds are guaranteed by the state, but you cannot trust a state that is broke like ours,” he says.

Some Argentines, especially the wealthy, have stowed their savings in the United States, Europe, and more stable parts of Latin America, allowing them to maintain a relatively high standard of living even after their country’s economic collapse. But those who take to the streets so regularly, challenging the government, have little money besides what sits untouchable in the banks. For them, without alternative sources of income or support, the bond scheme, for instance, offers no help in the short term, regardless of whether or not the government will even have enough money to pay back holders when bonds mature.

The recent protesters’ deaths only heightened distrust in both the government and financial establishment, and reinforced the pervasive belief that things will get worse before they get better.

A typical procession may start with hundreds gathered before the Bank of Boston, the crowd growing as it begins a typical march down Florida Street, waving signs, banging pots, wielding copies of Argentina’s constitution, dancing, whistling, setting off fireworks, and chanting slogans ranging from the satirical to plaintive calls of, “We want our dollars back.” The crowd crawls along, accompanied by squads of federal police.

Often, protesters stop to pound on the thick metal siding many banks recently have installed. Soon, every available space is plastered with signs blasting a rainbow of targets from banks to the International Monetary Fund (IMF), the United States and Duhalde’s government.

Foreign banks elicit especially vitriolic reactions. The Bank of Boston and Citibank, among others, wield considerable influence in the Argentine financial system. Following government mandate, they have been withholding most deposits despite continued access to foreign capital.

To protesters, this is no less than collusion, evidence of a massive fraud on the part of bankers and politicians. They also blame the IMF and foreign creditors, whose demands for austerity and fiscal discipline require that the government keep a tight reign on deposits, and reduce social welfare spending in exchange for foreign financial support and investor confidence. At the main Citibank location, graffiti on the battered metal covering doors and windows demands, in English, “Thieves Go Home!”

“The banks have a double morality,” 58-year-old Mercedes Gonzalez charges while banging a pot outside Citibank. “They do one thing in the United States but feel like they can do anything they want to us.” After three years of unemployment, Gon-zalez is running out of hope. “By the end of this year, I don`t know how my daughter and I will be able to live.”

Meanwhile, on one recent demonstration’s frontline, three men swing dead chickens hanging from miniature gallows labelled “thieving bankers” and ”corrupt politicians.” One of the demonstrators, a 27-year-old who gave his name only as German, says that his dollar earnings from a year of construction work in the United States are in the bank, leaving him unemployed and broke despite saving for years to go to university.

German and other demonstrators pledge that whatever happens, they will be out here three times a week until they can lay hands once more on their savings.

Kurtz-Phelan writes for the Buenos Aires Herald.

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