Argentina Bans Court Claims by Depositors

Argentine President Eduardo Duhalde took the unprecedented step Monday of suspending all court challenges to an unpopular banking freeze for 180 days in an attempt to shore up the teetering financial system.

The move, outlined in an executive decree, came after a surprise Supreme Court ruling Friday declaring the banking restrictions unconstitutional. The decree sets up a likely showdown among the three branches of government.

The restrictions, which severely limit access to Argentines’ savings deposits and triggered mass protests, were imposed Dec. 1 by Duhalde’s predecessor, Fernando de la Rua, to stop a run on the banks. Argentines had removed more than $1 billion from their bank accounts in one day alone.

Duhalde has said that giving Argentines unfettered access to their savings accounts risks collapse of the financial system and could spur some foreign banks to pull out of the country.

“We will allow the people to spend their money, but we will have to take great care with our next steps so that the financial system doesn’t collapse,” Duhalde told reporters Monday.

He said he hoped to bring greater stability to the economy so that he could begin relaxing the banking restrictions further.

Lawyer Gregorio Badeni, a constitutional expert, said he believed that the decree was questionable.

“It is not valid because no one can stop people from going to the courts to defend their rights,” said Badeni, adding that a 180-day suspension goes far beyond what is reasonable.