Argentina's president wins crucial vote

The president (left) and finance chief want special powers

Argentina's parliament has voted to grant some special executive powers to President Fernando de la Rua to help him push through urgent economic reforms.

Mr de la Rua and his new finance minister, Domingo Cavallo, have argued that Argentina's Congress needed to grant them executive powers to pull the country out of its 33-month recession.

The reforms include tax changes, deregulation of the financial markets, overhauling the country's bureaucracy and changes to the country's labour laws.

On Monday afternoon the lower house of Congress ceded some of its lawmaking authority to the president after 14 hours of debate.

Senate still to decide

However, the House's lawmakers are expected to continue debating individual powers on a case-by-case basis. Then the House will hand the proposal over to the Senate for final consideration.

Mr de la Rua may not have the power to decree laws that enact pension and labour reforms

The deputies in the Congress have also opposed giving the president all of the executive powers he sought.

They are holding back on granting Mr de la Rua power to decree laws that enact pension and labour reforms.

Opponents have argued that the special powers breach the constitution.

Spanish support

Meanwhile, Spain has given its approval to the new economic minister's reforms.

Mr Cavallo made a one-day visit to Spain on Monday to shore up investor confidence in Argentina and to win support for his reform programme.

"Spain has a lot of confidence in the future of Argentina," said the Spanish finance minister Rodrigo Rato.

We don't want more financial help. What we need is to re-establish confidence of direct investors

Domingo Cavallo
economic minister

But he added that Spain would not be offering Argentina any further aid.

The country already pledged a $1bn loan in December as part of the International Monetary Fund's $40bn bail-out package for Argentina.

"We don't want more financial help," said Mr Cavallo. "What we need is to re-establish confidence of direct investors."

Spain is the largest investor in Argentina's economy after the US. Spanish companies are estimated to have about $25bn invested in Argentina.

Mr Cavallo replaces Ricardo Lopez Murphy as economic minister and is Argentina's third economy minister in as many months.

Mr Lopez Murphy resigned over the deep unpopularity of his austerity programme, which proposed $8bn of public spending cuts.

In October, Argentina suffered a financial crisis that lasted for months after investors became concerned that the country would not meet its debt obligations.