Argentine president signs decree for phase-out of banking freeze

Argentina's president has signed a decree ordering a phase-out of a six-month-old banking freeze.

But Eduardo Duhalde will not reveal details on how he will carry out the move.

The partial freeze has held billions of dollars in Argentine savings in the tottering banking system.

That freeze helped accelerate Argentina's financial meltdown, which was followed by rioting that toppled the government of President Fernando de la Rua.

His successor has been hard-pressed since he took office in January to find an exit from the hated freeze.

Cabinet chief Alfredo Atanasof confirms Duhalde has signed the decree that will allow him to move ahead with a slow exit from the freeze.

Local reports suggest ending the freeze could still take years, saying the government might offer trapped bank depositors bonds that will mature in three to 10 years.

The banking freeze has left an estimated $12.5 bn (€13.3bn) trapped in fixed deposits and approximately $10 bn (€10.7bn) more in savings and checking accounts.

Savers have been clamouring for immediate withdrawal of their money, demonstrating outside banks with clanging pots and pans. They complain that bonds would keep their funds trapped for years.

Those who favour maintaining the freeze say Argentina's fragile banking system does not have sufficient assets to satisfy the demands of all depositors if the money were to be immediately withdrawn.