20000114

Argentine president seeks special economic powers

BUENOS AIRES: President Fernando de la Rua on Wednesday sent to congress a bill aimed at declaring an economic emergency in Argentina and giving him extraordinary powers to fire public servants and restructure debts, a government official said.

Communication secretary Dario Loperfido also said that the government would send congress a labour reform bill on Thursday, state-run news agency Telam reported.

An Economy Ministry source told Reuters the labour reform would allow salary discussions on a company-by-company basis instead of the current sectorial basis.

The bill is guaranteed to face stiff resistance from the now opposition Peronist Party, which fears it will wrest power from unions, mostly composed of Peronists.

De la Rua, of the centre-left Alliance, took office on Dec. 10, replacing Peronist Carlos Menem, who spent a decade in power.

The emergency bill would be in force for a year and could be extended for another one.

It would allow De la Rua to fire public servants or rescind contracts signed under Menem's administration, with the exception of contracts related to companies' privatisation, Telam said.

De la Rua has complained that in his last days in power, Menem hired public servants, greatly diminishing public coffers.

The bill would also allow the government to suspend for at least 180 days any court suit against it and to issue bonds to pay debts owed to state suppliers, the Economy Ministry source said. It also envisages the creation of special courts to prosecute tax dodgers.

The emergency bill is the heart of a package aiming at cutting 1999's record fiscal deficit of nearly $7.0 billion, or 2.5 percent of gross domestic product.

De la Rua has said the fiscal deficit will hamper Argentina's recovery from its worst recession in a decade.

Economy Minister Jose Luis Machina has said the recession is already over, but some private experts dispute that.

De la Rua has managed to get congress pass two key bills: this year's budget, which aims at a $4.5 billion fiscal gap, and a controversial tax increase to attain that goal.

"Passing the new bills will depend on the opposition. If they lend a minimum of cooperation, even by just not obstructing the bills, they may be passed quickly. But the labour reform will surely face resistance," said Jose Dumont, a lower chamber representative in the ruling Alliance.

Peronists control the Upper House and are the second-largest force in the lower chamber.-Reuters