The Wall Street Journal
October 24, 2008

BUENOS AIRES — A year ago, when leftist Cristina Kirchner was elected to succeed her husband Nestor as president, many Argentines hoped she’d follow a more conciliatory path than her mercurial spouse, who almost seemed to relish making enemies.

  • A d v e r t i s e m e n t

But with gambits like Tuesday’s proposal to nationalize private pension funds, the 55-year-old former senator has shown a combativeness that is every bit the equal of her husband’s. Mrs. Kirchner justified the proposed seizure of $30 billion in pension assets by accusing the funds of having instrumented “policies of plunder.” She said Argentina was setting an example of how to deal with the global financial crisis.

For Mrs. Kirchner, the fallout from the move is just beginning. The 10 pension funds, and many depositors, are threatening lawsuits. The Argentine stock market fell 10% Wednesday, on top of Tuesday’s 10% decline. Because the private pensions are big investors in local capital markets, the proposed nationalization has raised worries the government intends to tap new pension contributions for its own needs rather than invest the money in local stocks and bonds. For fragile local markets, the move compounded the impact of the global financial crisis.

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