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Argentina’s Cavallo announces comeback bid

July 8, 2005

BUENOS AIRES, Argentina (Reuters) – Former Argentine
Economy Minister Domingo Cavallo, widely blamed for the
country’s 2001 economic crisis, will return to Argentina from
the United States to run for Congress in October, his spokesman
announced on Friday.

Cavallo, 59, has decided to end his self-exile to campaign
for a seat as deputy in the lower house of Congress in Buenos
Aires.

“Cavallo formally registered so he is now a candidate,” the
economist’s spokesman told Reuters.

Local media have been speculating for the past two weeks on
Cavallo’s electoral bid. Friday was the deadline for presenting
candidacies.

The father of Argentina’s decade-long currency peg to the
dollar, which quelled inflation in the 1990s, Cavallo is now
mostly remembered for the “corralito,” or restrictions on bank
deposits in 2001 that infuriated the middle-class and triggered
a huge run on banks at the height of a prolonged recession.

He stepped down in December 2001, hounded by massive street
protests that also toppled then-President Fernando de la Rua.

The crisis that followed plunged millions of Argentines
into poverty and included record high unemployment, spiraling
inflation and the world’s biggest sovereign debt default.

Cavallo, a controversial figure known for his explosive
character, was also economy minister during President Carlos
Menem’s 1989-1999 government. His foreign exchange policy that
ended hyperinflation made him immensely popular at that time.

In a television interview on Wednesday, Cavallo denied any
responsibility for the 2001-2002 economic crisis and slammed
President Nestor Kirchner for his leftist rhetoric and for
making him a scapegoat.

He will run for the center-right Action for the Republic
Party.

In the Buenos Aires Chamber of Deputies race, Cavallo will
face Foreign Minister Rafael Bielsa; Elisa Carrio, a Kirchner
critic with a strong following; and Mauricio Macri, a
businessman and owner of the Boca Juniors soccer club.

A June 29 telephone survey by Ricardo Rouvier pollsters
showed 89.5 percent of the electorate would not vote for
Cavallo, while just 3 percent said they would.




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