Spanish/Nat XFA In a bid to pull Argentina out of a spiralling recession Argentinian President Fernando de la Rua appointed two new ministers who were sworn in on Monday. The appointment of Ricardo Lopez Murphy as Economics Minister was well received at the stock market where the index rocketed up early in the morning to later settle over 5 percent up. Argentine stocks surged from the opening bell on Monday as markets reacted favourably to the appointment of a renowned fiscal conservative, Ricardo Lopez Murphy, as economy minister in this country vexed by a 32 month recession. Market analysts said the strong reaction came as little surprise as the benchmark Merval Index rocketed up 6.9 percent to 479.43 points in early trading. It later was up just over 5 percent in midday trading. Last week, local shares took a beating on escalating rumours that Jose Luis Machinea, the former minister, would soon quit. Machinea's resignation finally came after markets closed on Friday, sparking a weekend political crisis in President Fernando De la Rua's cabinet. But many said on Monday they were pleased with the choice of Lopez Murphy, a U-S-educated economist who is popular on Wall Street. Argentina is now three years into a slump that shows no signs of easing. Unemployment stands around 15 percent and so far this year industrial production, construction activity, supermarket sales, government spending and tax collections have failed to meet the expectations of the government or analysts. After Machinea resigned, he told La Nacion newspaper in an interview that attacks on his job performance from within the government, but not from the President, spurred his decision. Lopez Murphy is known as being stern in manner and committed throughout his career as an economist to cutting taxes and trimming government spending to the bone. He moved over from the post of defense minister and is expected to move quickly to regain investor confidence in Argentina. As soon as this week, he's expected to press De la Rua and the Congress to slash a host of government spending programs, including workers' salaries, their pensions and outlays to the nation's 23 provinces. He's also expected to press for cuts in the nation's sales and income taxes as an incentive for Argentina's largest corporations and its small and medium sized companies to begin new investments and job creation. Lopez Murphy's appointment capped a weekend of negotiations at the presidential residence of Los Olivos with members of de la Rua's splintered two-party ruling Alliance coalition. In the midst of the negotiations over Lopez Murphy and the composition of Argentina's government as it prepares for October's legislative elections, De la Rua late on Saturday asked for the resignations of all his ministers. To replace Lopez Murphy at the Defense Ministry, De la Rua named Horacio Jaunarena, the former secretary general of the executive branch, the equivalent of a chief of staff. The President said that other changes in the cabinet could be made official later in the week. SOUNDBITE: (Spanish) "The new minister, Lopez Murphy, in my judgement will solve half of the problems. He is one of only two Argentinian economists, the other being Domingo Cavallo, who have the ability to instil confidence in the international financial system. What we have to see for the second part is if President De la Rua will be able to give sufficient support and endorsement and demonstrate the political coexistence that is needed for success." SUPER CAPTION: Rosendo Fraga, Political analyst SOUNDBITE: (Spanish) SUPER CAPTION: Rosendo Fraga, Political analyst SOUNDBITE: (Spanish) SUPER CAPTION: Fabio Tenuta, small business owner You can license this story through AP Archive: http://www.aparchive.com/metadata/youtube/e67aedd0e034b55af75525523e534268 Find out more about AP Archive: http://www.aparchive.com/HowWeWork

• published: 21 Jul 2015
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