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Thursday, 20 December, 2001, 02:22 GMT
Argentina declares state of emergency
union members in violent protest in Buenos Aires
Union members resorted to violence in Buenos Aires
The Argentine Government has declared a state of emergency after violence erupted over the country's worsening economic crisis.

Four people were killed and dozens injured on Wednesday in clashes with police across the country, in the worst civil unrest to grip Argentina since 1989.

Many enemies of the Argentine Republic are taking advantage of the economic and social situation to sow discord and violence, seeking to create chaos to enable them to achieve what they could not at the ballot box

President Fernando de la Rua
Argentine President Fernando de la Rua blamed the riots on "enemies of the republic" and called for political co-operation to tackle the crisis, in a televised address to the nation.

The emergency decree grants the Government special powers to quell looting and rioting and will last for 30 days.

It will allow the authorities to bring troops and other security forces onto the streets. Public meetings are also banned.

Thousands of people took to the streets - many looting from stores - in protest at wage cuts, spiralling unemployment and strict government austerity measures aimed at coping with a massive public debt and four-year-long recession.

Default risk

The credit ratings agency Standard & Poor's has warned that Argentina could default on its $132bn sovereign debt as early as next month.

Map of Argentina with cities
"It is likely, though still not certain, that in the very short term, Argentina will miss a payment on their debt," said the agency's managing director of sovereign debt rating, John Chambers.

"That would be outright default."

A default would in effect cut off any lifeline from the International Monetary Fund and send Argentina spiralling even deeper into a chaotic economic crisis.

The government has acted swiftly to try to take control of the situation, announcing it will start distributing free food.

The Labour Minister, José Gabriel Dumón, said the president had already authorised the distribution of $7m worth of food, and he called on Argentines to remain calm.

Running battles

Police clashed with rioters in the capital, Buenos Aires, and the provinces, as protests which began at the weekend escalated.

I feel bad about it but we're dying of hunger

Sonia Aristici, looter

Dozens of stores were ransacked in Buenos Aires and the northern Entre Rios province, while in the second-largest city, Cordoba, workers protesting at government plans to reduce wages set fire to the town hall.

Looting of supermarkets was reported in at least half a dozen cities, including Rosario, north of Buenos Aires, and Mendoza in the west.

In Santa Fe province, north of the capital, a 15-year-old boy was shot dead by an unidentified gunman.

Elsewhere, a man was stabbed to death by a storeowner on the outskirts of the capital, and a man and a woman were shot dead by shopkeepers trying to protect their stores in the same area.

President under pressure

As the violence raged, the opposition-dominated Congress voted to repeal special powers granted to Economy Minister Domingo Cavallo earlier this year.

Argentinean woman pushing to get food parcel
Women fight to get food handouts
Similar unrest marked the last financial crisis in Argentina in 1989, forcing the then president, Raul Alfonsin, to leave office early.

There is now growing pressure on President de la Rua to do the same.

On the streets, some supermarkets handed out food packages to prevent looting as thousands of people gathered outside shops, while police in riot gear - heavily outnumbered by protesres - stood guard.

The violence also resulted in the cancellation of the second-leg final of the Copa Mercosur football competition between Argentina's San Lorenzo and Flamengo of Brazil.

Deepening recession

The social unrest has been provoked by a deepening economic crisis in Argentina.

There has been a recession in Argentina for almost four years, and unemployment has risen to almost 20%.

Mr de la Rua and Economy Minister Domingo Cavallo are desperately trying to avoid a devaluation or a default on Argentina's foreign debt payments.

Earlier this month, the IMF refused Argentina a further $1.3bn in standby loans, unless it balanced its budget for the year 2002.

Mr Cavallo has put forward budget proposals slashing government spending by 20% - but only by cutting public sector wages and reducing pension provisions.

The BBC's Raphael Jesurum
"It soon turned into a running battle"
Argentina expert Louis Goodman
"Devaluation of the peso would help"
Martin Redradro, Fundacion Capital
"The budget misses the point"

Debt rescue
Should the IMF bail out Argentina?
See also:

19 Dec 01 | Americas
In pictures: Argentina unrest
14 Dec 01 | Business
Argentina meets debt deadline
19 Dec 01 | Business
Argentine crisis ripples spread
13 Dec 01 | Americas
Argentina delays pension payments
10 Dec 01 | Business
Argentina in new bid to cut debts
09 Dec 01 | Business
Argentina fails to win IMF reprieve
03 Dec 01 | Americas
Fear of ruin haunts Argentines
03 Dec 01 | Business
Analysis: Argentina's woes explained
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