Argentina stocks plunge on pension news

October 21, 2008 9:37:27 AM PDT
Argentine stocks are plunging in reaction to plans to nationalize nearly US$30 billion in private pension funds.The Merval index has dropped more than 10.5 percent after word leaked that President Cristina Fernandez wants government control over the private money.

The government says it has to protect retirees with stocks and bonds falling due to the global financial crisis.

But political opponents say it's a scramble for cash to prop up falling tax revenue. And the plan is already causing havoc in the markets. Analysts say it puts property rights at risk and calls into question the rule of law in Argentina.

Fernandez plans to detail her plan Monday afternoon. It needs approval in Congress, where her party has a majority.