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General Strike grinds Argentina to near-halt

BUENOS AIRES, July 19 (AFP) - Argentina ground to a near-halt Thursday as most of the country's 13 million workers joined a general strike protesting President Fernando de la Rua's belt-tightening proposals, with busses, trains and airlines forced to cancel service as angry workers stayed home.
Up to 95 percent of the country's workers refused to go to work Thursday, according to labor leaders, who organized the sixth and most widespread general strike against de la Rua since he took office in December 1999.

De la Rua himself presented a stoical front, emphasizing to reporters that Argentina has taken "the firm decision of honoring its foreign obligations," and reiterating that the government will not spend more than it collects in taxes.

The president also discussed with Finance Minister Domingo Cavallo how to shepherd the austerity plan -- aimed at balancing Argentina's budget and help pay off its 128-billion-dollar foreign debt -- through a skeptical Congress.

Traders at the Buenos Aires stock market however were unimpressed, with shares falling 1.67 percent to 319.79. Argentina's risk premium, which affects the interest it pays on bonds, rose to 1,583 basis points, up from 1,517 late Wednesday.

"The market has run out of patience, and wants actions rather than words," a trader at a local Buenos Aires bank said.

The government also reported Thursday that the unemployment rate grew to 16.4 percent in May from 15.4 percent one year earlier.

The strike comes one day after most of Argentina's 1.5 million government employees walked off the job to protest 13-percent cuts in government salaries and cuts in retirement benefits.

Massive strike support shows that Argentina "rejects the totally reactionary measures pushed by the government in a search for a balanced budget," said labor leader Rodolfo Daer, one of the strike organizers.

Hardline labor leader Hugo Moyano said that Argentines "do not accept, do not tolerate" the proposed measures, which "expect those who least have to pay the debt."

Most buses in Buenos Aires suspended services due to the stoppage called by the General Confederation of Labor, which has some nine million members.

Trash piled up in the streets, government offices were vacant and hospitals relied on emergency staff to operate.

Police said that protesters in Buenos Aires threw firebombs at a bus, railway cars and a taxi, injuring the taxi driver.

Aerolineas Argentinas was forced to suspend its flights, since its technicians joined the strike, union personnel said.

Government spokesman Juan Pablo Baylac criticized the strikers, saying they "give nothing to Argentine society."

De la Rua has so far failed to win political support for his austerity plan, introduced last week amid fears that Argentina could default on its foreign debt.

Lawmakers from his own ruling alliance insist measures should be taken to soften the impact of wage and pension cuts. Opposition Peronist deputies in Congress reject the cuts outright, according to the party's leader in the lower house, Humberto Roggero.

On Wednesday, the Supreme Court of Buenos Aires province ruled unconstitutional wage cuts and payments to suppliers with bonds by provincial decree, causing Governor Carlos Ruckauf to warn Thursday the key province will default on its payments by the end of the month.

If Argentina were to devalue the peso or abandon its currency peg against the dollar altogether, the impact on public debt could make the situation worse, economists warn, as more than 70 percent of all Argentine debt is denominated in dollars and a devaluation would make debt servicing untenable.



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