Argentina's lower house of Congress today shelved the ruling party's proposed changes to a so-called "economic subversion" law opposed by the IMF, voting instead for an opposition plan legislators said was unlikely to unlock aid from the lender.
After a confusing eight-hour debate, the lower house ditched the original changes proposed by the governing Peronist Party and instead approved an alternate set of mostly cosmetic changes put forward by the main opposition Radical Party.
The vote was seen by some lawmakers as a political defeat for President Eduardo Duhalde, who a top aide said last night threatened to resign unless Congress made progress on the law.
Most legislators said the changes would not be enough to satisfy the International Monetary Fund, which has demanded the repeal of the law it says gives judges a blank check to persecute bankers suspected of illegal capital flight.
"The changes made were not very substantial," Adrian Menem, a deputy for the ruling Peronist Party, told Reuters. "The government won't be happy with this at all, and neither will the IMF. It basically puts things back in the Senate's hands."
Argentina desperately needs IMF aid to stabilize a four-year recession that has put the entire financial system on the brink of collapse and left about 25 per cent unemployed and half the nation living in poverty.
The IMF froze aid to Argentina in December in disgust at the government's runaway spending.