Utilities to sue Buenos Aires administration

3 Jul 2003

Telefónica has joined a long list of utilities to mount a legal challenge against the Argentinian government. The companies claim that the administration broke contractual obligations to them last year by unpegging the peso from the dollar. Since then utilities have struggled to match peso-denominated income to dollar-denominated debts, a fight which has left many of them on the brink of insolvency. Moreover the government has forbidden the companies from increasing prices, despite inflation running at around 40%.