Argentina hit with budget cuts fallout


BUENOS AIRES, AFP

Argentine President Fernando de la Rua moved Saturday to assuage fears about a new US$8 billion austerity program as protests mounted amid suggestions from the opposition that congress shut down.

Friday, Economy Minister Ricardo Lopez Murphy unveiled the three-year measures designed to inject new life into the country’s flagging economy by substantially cutting the budgets for health, education and federal assistance to the country’s provinces.

De la Rua spent Saturday in marathon meetings with party faithful in attempts to minimize the cuts in funding for education, which sparked protests at one of the country’s largest universities in Buenos Aires province, where budget cuts of some US$902 million are planned.

De la Rua also worked to marshal his troops Saturday in the wake of Friday and Saturday’s resignations by key officials to protest the measures, which will cut government spending by more than US$1.9 billion this year, by almost US$2.5 billion in 2002 and US$3.5 billion in 2003.

Interior Minister Federico Storani, Education Minister Hugo Juri and Social Development Minister Marcos Makon resigned after Economic Minister Ricardo Lopez Murphy announced the program late Friday. Ricardo Mitre, general secretary of the presidency, and Deputy Interior Minister Nilda Garre followed suit, while the cabinet’s deputy chief of staff, Graciela Fernandez Meijide, said she would quit on Monday. The departures of Storani and Meijide, key architects of the ruling coalition, are seen as particularly painful.

Lawmaker Alicia Castro, who represents the dissident Peronist and Socialist front FREPASO, said she would no longer support the ruling alliance because it “no longer represented the coalition for labor, justice and education that people voted for.”

The Peronist opposition was even more dismissive of the austerity plan, with opposition leader Humberto Ruggero suggesting the congress disband while the ruling coalition work out its internal struggles.

“How can they ask the opposition to support something they cannot fix themselves?” he asked. The plan has won the “full support” of the International Monetary Fund, the prime lender in a US$40 billion loan package, said Claudio Loser, director of the IMF’s Department of Western Hemispheric Affairs.