Four Argentine deputies to leave ruling Alliance

BUENOS AIRES, Argentina (Reuters) -- Four members of Congress will leave Argentina's ruling Alliance, which already needs minor party support to obtain a lower house majority and is on the verge of a major split, one congressmen said on Wednesday.

The four renegade members of the Chamber of Deputies have decided the center-left coalition led by President Fernando de la Rua has swung too much toward the free-market right since defeating the Peronist Party in elections last October, Deputy Alfredo Bravo told Reuters.

The Alliance has been on the verge of breaking up since the shock resignation on Friday of Vice President Carlos Alvarez -- leader of the more left-leaning Frepaso which is the junior coalition partner to De la Rua's centrist Radicals.

Alvarez quit the Alliance to protest De la Rua's muted response to a bribes-for-votes scandal in the Senate. He promises the Alliance will hold together, but analysts and some politicians say that the coalition's future could be bleak.

Bravo said he, two other of Frepaso's 36 deputies and one of the 82 Radicals were fed up with both De la Rua and Alvarez and will quit the Alliance altogether.

With the withdrawal of the four, the Alliance will have 114 members in the 257-member Chamber of Deputies. The Peronists, who ruled Argentina from 1989-1999 under President Carlos Menem, have 100 deputies and control the Senate.

FOUR OPPOSE IMF ECONOMICS

"We oppose the government's economic policy," said Bravo, adding that other deputies may also leave the Alliance.

Bravo said that the four plan to form a block, and the first vote the new leftist group intends to make will be to reject the austere 2001 budget -- which the government needs approved to meet fiscal targets agreed with the International Monetary Fund, Bravo said.

In fact, the four rebels have been voting against major government policy initiatives -- including labor market reform and salary cuts for public officials -- for some months.

The government is struggling to revive the economy after two years of stagnation which shows little sign of ending.

It vows to do so without abandoning the strict discipline of the one-peso-one-dollar fixed exchange rate which has ended long out-of-control inflation and brought economic stability to Argentina since its introduction in 1991.

Now De la Rua faces serving out the rest of his three-year term with a possibly hostile Congress.

Alvarez wanted De la Rua to fire government officials who had been forced to deny bribing opposition senators to pass a labor market reform bill in April.

One of the officials he had most criticized -- former Labor Minister Alberto Flamarique -- has since resigned. But De la Rua has so far refused to fire his secret service chief, who is also on Alvarez's black list.

The Senate was due to meet later Wednesday to formally accept Alvarez's resignation.

With his coalition shaky, the president has shown signs of making overtures to the opposition Peronists, asking them to behave responsibly for the good of the country.

Popular frustration growing

Popular frustration is mounting with a government which won election promising to both reduce unemployment, which is at 15.4 percent, and clean up politics after 10 years of regular corruption scandals under Menem.

Opposition unions plan a half-day strike Wednesday afternoon to protest wage cuts and new labor rules which make it easier to hire and fire. The government backed down last week after a stoppage by truck drivers, pressuring oil companies to provide cheaper fuel and promising lower road tolls.

"We're going backward. We're economically worse off than we were a few months ago, and we're also going backward in the area the Alliance boasted so much about -- government ethics," said the union protest leader, Hugo Moyano.

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