ALBANIA DECLARES EMERGENCY : ANGRY PROTESTERS BURN BUILDINGS, LOOT BANKS.

Byline: Jane Perlez The New York Times

The Albanian government imposed a nationwide state of emergency Sunday night in an effort to assert control as anarchy engulfed Europe's poorest and now angriest country.

The southern half of the country spiraled out of the government's hold Sunday, as enraged protesters, firing weapons ransacked from military warehouses, burned buildings and looted banks and stores in the southern coastal city of Sarande.

At least four people were reported killed by gunfire in other Albanian cities.

The state of emergency, which bans people from gathering in groups of more than four and authorizes ``all force'' by the army, police and secret police, was seen as a last-ditch gamble by the widely unpopular president, Sali Berisha, a former ranking member of one of communism's most isolated and hard-line parties.

On Saturday, in an attempt to ``resolve the problems,'' Berisha announced the resignation of Prime Minister Aleksander Meksi and his Cabinet, but the gesture did not allay unrest.

And it was unclear whether Berisha, who warned in a televised address Sunday night that an ``iron hand'' would be used to end violence, would be able to crush the rebellion, which was set off by the collapse of fraudulent financial schemes in which many Albanians lost all their savings.

Faced with a police force that has deserted most of its posts out of sympathy with the protesters and a miserably paid, disaffected army that has abandoned its barracks, the government announced Sunday night that the feared secret police, known as Shik, would take a lead against what it called ``terrorist bands.''

Transmissions of British Broadcasting Corp. and Voice of America were cut after parliament, where only Berisha's party sits, unanimously approved the state-of-emergency law.

For the United States and Europe, an Albania out of control means more than the country's population of 3.2 million and backward economy might initially suggest.

European nations, particularly nearby Greece and Italy, fear a repeat of the large exodus of Albanian refugees who fled in 1991 after the collapse of communism.

For Washington, Albania is considered vital to the stability of the volatile Balkans. After Berisha came to power, the State Department supported him as a helpful ally in containing the potentially explosive tensions in Kosovo, the region in Serbia where restive ethnic Albanians far outnumber Serbs.

While he was the U.S. defense secretary, William Perry twice visited Albania to highlight Albania's significance in the southern flank of Europe.

But in a sign of Washington's disillusionment with Berisha, the U.S. ambassador here, Marisa Lino, gave an unusually candid interview to the opposition newspaper Koha Jone last week. She said Berisha, who presided over blatantly fraudulent parliamentary elections in May, should call new elections and start rewriting the constitution.

The State Department spokesman said last week that it was ``deeply concerned'' by Berisha's refusal to make any concessions to the protesters.

Demonstrations of frustration in the last month over the loss of savings in the pyramid schemes ballooned in the last week to what amounted to civilian uprisings against Berisha's rule.

CAPTION(S):

PHOTO A man shoots an AK-47 into the air in Vlora, Albania, where astate of emergency was declared Sunday.

Associated Press