Argentine union bosses vow to paralyze country

BUENOS AIRES, Argentina (Reuters) -- The leaders of Argentina's three most powerful unions promised to "paralyze" the country on Thursday and Friday in a 1 1/2 day nationwide strike against the government of President Fernando de la Rua.

They predicted the strike would include ordinary Argentines opposed to new austerity measures announced by De la Rua, aimed at winning back the favor of markets worried about Argentina's ability to pay its debts.

"We're going to stage a decisive strike. Because it's not just the unions that are walking out, but shopkeepers, doctors and teachers as well," Hugo Moyano, combative head of the "dissident" faction that split off from the General Workers' Confederation (CGT), told Reuters on Wednesday.

Hardline unionists in Moyano's CGT faction and the Argentine Workers' Center (CTA) first called a 36-hour strike starting at noon on Thursday to protest the death of a man in clashes between police and people manning a roadblock in Salta province two weeks ago.

Roadblocks by some of the 15.4 percent of Argentines who are jobless and about 30 percent who are poor have spread like wildfire up and down the country in recent weeks.

The calls for industrial action gained urgency after De la Rua announced a raft of investor-friendly reforms. He abolished state pensions, raised the women's retirement age and froze public spending for five years to rein in the budget deficit.

The "official CGT," Argentina's biggest union which was criticized in the previous Peronist administration for cutting deals with the government, decided to join the stoppages on Friday.

With all three unions walking out, Argentina could grind to a halt by Friday, with buses, trains, airlines, gas stations all closed, forcing many people to join the doctors, teachers and other state employees who may plan to stay away from work.

"I believe millions of Argentines will join the protest and bring the country to a standstill for at least 24 hours," CTA chief Victor de Gennaro told Reuters. His followers were planning wildcat roadblocks to add to the strike chaos.

The stoppage opens another front for the center-left Alliance government as it battles to regain the confidence of consumers at home and investors abroad after 2-1/2 years of economic recession, stagnation and rising unemployment.

Economy Minister Jose Luis Machinea has frantically tried to calm markets worried about poor growth prospects of 0.7 percent this year and doubts it can reach 2.5 percent in 2001, a budget deficit seen at $5.3 billion this year and $6.4 billion next year, and financing needs in 2001 of $19.5 billion.

Argentina's country risk, measured by the "spread" between its benchmark FRB Brady bond and safe-haven U.S. Treasury bonds, had spread in recent weeks as investors fled and credit-rating agency Standard & Poor's downgraded Argentine debt a week ago.

De la Rua scored a goal by getting opposition-held provinces to sign up to his five-year spending freeze this week, a deal the International Monetary Fund was awaiting before it would OK a big emergency financing package which could be worth up to $20 billion.

Such backing meant that when Moody's, another rating agency, downgraded Argentina on Tuesday, markets barely flinched.

Aware that the timing of the strike could not be worse, De la Rua's ministers condemned it as "irresponsible" and briefly tried to have it declared illegal.

Labor Minister Patricia Bullrich said on Wednesday there had already been attacks by pickets on buses and taxis to scare them out of working in the strike.

"Instead of helping out at this tough time for our country, unions have turned their backs on us," she told reporters.

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