Argentine cabinet takes shape

Some doubt Mr Duhalde's leadership credentials

Argentina's new President Eduardo Duhalde has been putting together the government team he hopes will lead the country out of economic crisis.

Mr Duhalde was sworn in at a brief ceremony on Wednesday, before immediately entering into talks on forming a cross-party cabinet which he says will deliver a "programme of national salvation".

Five presidents in two weeks:

Fernando de la Rua

Ramon Puerta

Adolfo Rodriguez Saa

Eduardo Camano

Eduardo Duhalde

The new economy minister will be Jorge Remes Lenicov, from the president's Peronist party, while Buenos Aires Province Governor Carlos Ruckauf is being suggested as foreign minister.

The BBC's correspondent in Buenos Aires, Daniel Schweimler, says some senior Peronists have turned down posts in the new administration, unhappy that Mr Duhalde lacks the democratic credentials to govern.

Mr Duhalde, who failed to win the presidency two years ago, was voted in by Congress to complete the term of the unpopular Fernando de la Rua, his then opponent, who resigned amid protests a fortnight ago.

Protests have declined in size

Argentines have been continuing to hold protests and government buildings remain under heavy guard, although the protests are smaller than those seen in previous days.

The Buenos Aires stock exchange, however, expressed its confidence in the new leader. Prices rose by more than 9% at the end of Wednesday's trading.

The United States has urged Mr Duhalde to work closely with international financial institutions.

A state department spokesman said he hoped Mr Duhalde would persevere in developing a sustainable economic plan.

Expected devaluation

Unemployment in the country is running at 18% and last week Argentina halted payments on its massive public debt, which figures out on Wednesday showed had risen to $141bn.

Mr Duhalde - Argentina's fifth leader in two weeks of near-chaos - used his acceptance speech to pledge a "new model" to deal with the country's problems.

Argentina in crisis

Early in December, IMF refuses to disburse $1.3bn aid

20 December 2001: President de la Rua resigns after riots

23 December: Adolfo Rodriguez Saa sworn in

30 December: Mr Rodriguez Saa resigns

1 January 2002: Eduardo Duhalde elected new president

He said he would announce his government's economic plans on Friday.

Correspondents say there is growing speculation he might be forced to devalue the national currency, the peso, which is formally pegged at one-to-one to the US dollar.

An unnamed adviser to Mr Duhalde told Reuters news agency that the peso could be depreciated by more than 30%, setting a new rate of 1.3 pesos to the dollar.

But experts say any devaluation would be extremely unpopular with the country's middle class.

Their debts are mainly denominated in dollars and would become more expensive to pay off if the peso fell in value.

Challenge ahead

Mr Duhalde, a senator from the populist left of Argentina's dominant Peronist party, blamed the crisis on a decades-old "model of social exclusion".

He said government policies had pushed two million Argentines into poverty, destroyed the middle class and bankrupted industries.

Our correspondent says Mr Duhalde is likely to last longer than his predecessors, having won the support of political colleagues.

But he says the Argentine people - who blame corruption and mismanagement by politicians for the crisis - have made it clear they want action not more promises.