Argentine Senate approves cuts

By: Unknown
CNN News, July 30, 2001

Argentina's Senate has approved controversial austerity measures designed to balance the budget and revive the economy. 

The plan, put forward by President Fernando De la Rua, includes cuts of up to 13 percent in pensions and public employee wages. 
The president is expected to quickly sign the package, which calls for $1.5 billion in spending cuts in an attempt to ease Argentina's budget deficit and calm financial markets. 

Government spending and heavy debt has kept Argentina in a three-year recession, with the jobless rate topping 16 percent. Investors feared the country would not be able to maintain payments on its $130 billion of debt. 

As the largest Latin American borrower of money, Argentina's woes have recently shaken world markets and regional currencies. 
The Senate's 26-18 vote followed nine hours of debate in an effort to approve the measures before markets opened Monday. 

The bill could help Argentina get affordable credit again in international markets. Two weeks ago the country found itself effectively shut out of credit markets when it faced double-digit interest rates at a routine treasury bill auction. 

However, the measures have been met with anger by union leaders and public workers, who recently held a 24-hour national strike in protest. 
The Senate, dominated by the opposition Peronist Party, has been sharply divided over the plan.