BUENOS AIRES, Argentina (AP) - Argentina's new president reached into the ranks of both big business and his Peronist Party for a crisis cabinet Thursday in preparation for an expected devaluation to stave off economic collapse.
The new leadership took shape amid reports the government was officially in default for the first time - missing a 28 million payment on an Italian bond.
New Cabinet Chief Jorge Capitanich said Argentina, now virtually bankrupt after four years of recession, would be unable to meet other payments on its 132 billion debt. The government, he said, wants to negotiate the debt in what Wall Street considers the biggest national default in history.
Economy Minister Jorge Remes Lenicov said he would announce his plans on Friday, and news reports predicted the government would devalue, ending a 10-year-old peg that anchored the peso one-to-one to the U.S. dollar.
President Eduardo Duhalde, who swore in his Cabinet a day after taking office as Argentina's fifth president in two weeks, made no comment regarding plans for the currency. But he has vowed to chart a new economic course.