Argentina acts to ease economic crisis

Argentine leaders are hoping for cash

The Argentine government has announced a series of measures it says will strengthen social spending and launch a "new economic cycle".

The unexpected announcement came as International Monetary Fund officials arrived in Buenos Aires on Tuesday, for talks seen as crucial for the resumption of suspended aid.

The measures include new taxes on exports - with the money being earmarked for social programmes - and $500m in loans for manufacturers and producers.

Economic woe

$141bn debt

Peso devalued

22% unemployment

45% of Argentines below poverty line

In recession since 1998

The government is also offering savers whose deposits were frozen a chance to exchange the deposits for dollar-denominated or peso-denominated bonds.

It is unclear how many account holders will be willing to accept the new bonds since the country has already defaulted on part of its $141bn public debt in January.

But Economy Minister Jorge Remes Lenicov insisted the package would "improve the performance of the economy, give fiscal solvency, strengthen social programs and help companies recover so as to launch a new [economic] cycle."

Teachers' protests

The news came as protests continued in many parts of Argentina against the government's failure to come to grips with the prolonged economic and social crisis caused by the forced devaluation of the peso in January.

Patients are dying every day for lack of imported medical supplies

Surgeon Luis Molteni

Teachers and surgeons are among the latest groups to take strike action.

Eduardo Duhalde, Argentina's fifth president since mid-December, faces a difficult dilemma.

He must reconcile the tug-of-war between his responsibility to those like the teachers, who are clamouring for more funds to ease the recession's pain, and the demands of the IMF, which wants decades of runaway government spending to end.

Argentina is reportedly seeking as much as $23bn (£16bn) of aid. It desperately needs new funds to help the banking sector and remove highly unpopular controls on cash withdrawals as well as supporting its newly-floated currency.

In December, the IMF cut off Argentina's access to a $22bn loan programme.

Hard times

"These are the hardest times we've ever lived through in the national education system, in the country generally and for those who are unemployed," said leader of CTERA, Argentina's biggest teachers' union, Martha Maffei.

"Never before have we seen 50% of our children living below the poverty line," she said during a day of protests in which teachers asked the government to fulfil its wage obligations.

Head of the Argentine College of Cardiovascular Surgeons, Luis Molteni said: "Patients are dying every day for lack of imported medical supplies.

"The lack of medical supplies means that there are virtually no cardiovascular operations taking place."