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Protesters burn Argentine town hall

Unrest spreads to a provincial capital after overnight violence in Buenos Aires as anger mounts at government austerity plans.
Protesters in Argentina have set fire to the town hall in the provincial capital of Cordoba, after a night of violence there and in Buenos Aires.

In Cordoba, a car-making centre northwest of Buenos Aires, workers protesting at government plans to reduce wages and apply other austerity measures, occupied the town hall, and then set light to the building.

Police dispersed the demonstrators using tear gas and rubber bullets. So far there have been no official reports of casualties, although local television showed several people hurt and others being arrested.

In several suburbs of the capital, Buenos Aires, people smashed shop windows in the early hours of Wednesday, stealing merchandise from food to clothing as police in full riot gear fired tear gas to disperse them.

At one rally, demonstrators shouted: "We are hungry; we want food!"

- Government debts

The unrest follows new government attempts to cut spending to ensure it can keep servicing its $132bn debt.

Five police officers were injured in the clashes, according to officials. Police were reported to be planning to step up their presence outside supermarkets in the capital later on Wednesday.

The protests come amid a deepening economic crisis in Argentina.

The government hopes to balance the books by cutting spending in 2002 by almost 20%.

Economy Minister Domingo Cavallo earlier this week proposed a trimmed-down budget that pares nearly $10bn in government spending, bringing the overall budget down to $39.6bn.

If approved by Congress, the budget would cut state workers' salaries by 13% in the coming year.

- Mr Cavallo is hoping for a speedy approval

The government is hoping for a quick approval of the budget, so that suspended loans by the International Monetary Fund can be restored by the end of the year.

But to do that, the budget needs to be passed this week, and leaders in Congress have indicated that this is likely to prove difficult.

Opposition politicians say it will further impede an economy already mired in three and a half years of recession.

The government has already proposed eight previous austerity packages to stave off an economic meltdown.

"Austerity programmes have only served to complicate the lives of Argentines," said Jose Luis Gioja, the Senate leader of the Peronist Party.

- IMF statement

Further contributing to the government's difficulties were statements by the IMF criticising the country's economic policies.

"It's clear that the mix of fiscal policy, debt and the exchange-rate regime is not sustainable," said IMF chief economist Kenneth Rogoff on Tuesday.

Mr Rogoff made the comments in response to questions following the IMF's release of its latest World Economic Outlook (WEO) - the third this year - which painted a bleak picture for the global economy.



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