Argentina Plagued by Riots and Recession

It’s not clear whether President Rodriguez Saa has accepted the resignation of his cabinet.

Thousands of residents of the capital Buenos Aires marched to the Presidential palace, Casa Rosada on Friday night. Some protesters pounded on the doors of the presidential palace, while others broke into Congress, where they dragged out furniture and set small fires.

"These gangsters have got to go!" yelled one woman as she and thousands of others beat pots and pans in front of the palace in anger.

As police used tear gas and water canons to disperse the crowd, the ensuing clashes towards dawn led to more than 10 policemen being injured. About 33 people were arrested.

Public anger over limited cash withdrawals

The frustration of the protesters, most of them belonging to the middle class, came to a boil as they railed against a Supreme Court decision on banking curbs. Argentineans are now allowed cash withdrawals of only $1,000 per month.

The stringent restrictions have further throttled consumer spending. Some Argentineans fear that their life savings may be simply swallowed by the cash-strapped government. "I put my money in the bank for them to look after it, not to be stolen," read one protester's sign.

Argentina is in the throes of a fourth year of brutal recession with unemployment soaring over 18 percent.

Sick of corruption and cronyism

The demonstrators were also protesting against President Saa appointing his friends and political cronies in his cabinet, despite these politicians being involved in mismanagement and corruption scandals in the past.

Carlos Grosso, chief adviser to the cabinet, but widely suspected of corruption during a stint last decade as mayor of Buenos Aires, resigned as the massive crowds outside the presidential palace chanted his name in disgust.

Riots in Argentina last week claimed 27 lives, and led to the resignation of former president Fernando de la Rua on December 20.

Saa tries to save face

President Rodriguez Saa, who stopped payments on Argentina’s foreign debt after he was appointed President last Sunday, is under fire from all sides.

Hoping to defuse popular discontent, Rodriguez Saa said that he had asked the banks to open for longer hours on Monday and ensured that all automatic cash machines worked to enable payments of salaries and pensions up to 1,000 dollars.

Rodriguez Saa also said finance department officials would meet with the Central Bank to ensure that all cash machines would function on Monday. He said he would meet with provincial governors to discuss the government’s crisis plan.

Proposed new currency comes in for flak

Saa has also been criticised for his proposals to float a new currency, the "Argentino" alongside the peso. He hopes the new money can ease a cash crunch, but many fear it will lead to massive inflation since it will be backed only by government property like the Presidential Palace. There is no indication of much new money will be minted.

Bush urges Argentina to work with IMF

Meanwhile American President Bush urged Argentina's interim president to work with the IMF to develop a "sustainable economic plan" for the crisis-hit country, the White House said.

Bush stressed his commitment to strong bilateral relations and emphasised Washington's willingness to support Argentina through the International Monetary Fund and other financial institutions if it got its fiscal and monetary policy in order.

The IMF has already lent Argentina $20 billion this year, but froze aid earlier this month.