The downgrade of the long-term sovereign credit ratings on the Republic of Argentina reflects a difficult policy environment, in which the government is struggling to calm political and market pressures by introducing a workable economic program that strengthens competitiveness, reduces fiscal imbalances, and ultimately restores growth. Although the political establishment appears to be moving toward closing ranks and supporting the broad outline of the economic program proposed by newly appointed Minister of the Economy Cavallo, this came only after the threat of a serious economic crisis became credible. The continued CreditWatch (all ratings remain on CreditWatch with negative implications, where they were placed on March 19, 2001) reflects remaining uncertainties surrounding Minister Cavallo's specific yet-to-be-announced economic measures and the reaction
