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Opposition protests against cuts.

BUENOS AIRES -- Governor belonging to the Justialista party, backed by labor unions, are opposing government efforts to reduce payments to the provinces. While the federal government has imposed budget cuts on state employees, retirees and a wide range of government ministries, the Peronist governors are demanding that the government abandon plans to slash the $1.364 billion in monthly payments given to the provinces. However, government officials argue that the funds are the last area where significant cuts are possible.

Some of the provinces are in dire economic straits in their own rights. Several have been forced to pay state employees with provincial bonds because they do not have the cash to pay salaries. The country's 23 provinces owe $22 billion in debt, on top of the $128 billion owed by the federal government. Most are considered to be in such precarious financial condition that lenders and investors refuse to advance them any more cash.

Meanwhile, unemployment of more than 16% has brought labor unions out into the streets to protest. Demonstrations this week paralyzed traffic in the capital and other cities.
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Title Annotation:budget cuts to provinces in Argentina source of dischord
Publication:America's Insider
Article Type:Brief Article
Geographic Code:3ARGE
Date:Aug 30, 2001
Words:182
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