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Argentina in state of siege after deadly riots

BUENOS AIRES, Argentina (CNN) -- Violence raged through the night and into Thursday morning following a government-declared state of siege after at least two people died in escalating violence by rioters angry at the country's economic crisis and the failure of a government austerity plan to keep the economy afloat.

The state of siege -- in effect for 30 days -- suspends constitutional rights and gives the government wide-ranging power to quell the violence.

"We have a clear conscience of how our compatriots are suffering, and it is my duty to work to solve this social emergency," said President Fernando De la Rua in a short televised speech.

Looting turned to protest late Wednesday as tens of thousands of people beat pots and pans, clapped, waved flags and took to their cars, honking horns to protest what they see as an insufficient reaction to the problems they are facing. Firefighters rushed to extinguish fires set off around the Presidential Palace by incendiary devices.

There were calls for the president and members of his Cabinet to resign.

CNN's Lucia Newman reports some Argentinians have resorted to looting supermarkets because of dire economic conditions (December 19)

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The Argentinian government implemented the austerity measures over the summer. But the International Monetary Fund has so far refused to release a $1.3 billion loan payment, saying Argentina has failed to balance its budget despite the plan.

Police used tear gas to disperse the crowd outside the Presidential Palace. Crowds had also gathered outside the home of Economy Minister Domingo Cavallo to express their displeasure in the midst of the economic crisis.

The official government news agency reported two people died from gunshot wounds and dozens were injured as rioters ransacked and set fire to grocery stores and other shops around the capital.

Earlier in the day, police were "completely outnumbered" by the rioters, CNN Correspondent Lucia Newman reported, and were only able to disperse a few crowds by firing tear gas and rubber bullets.

Rioters said they are hungry and complained the government has not helped them.

In an effort to end the riots, the government said it will make available $7 million to provide food for the most needy.

Earlier in the week, people were swarming banks in an effort to withdraw their savings.

The government is considering seizing pension funds and has already capped bank withdrawals to $1,000 per month.

Argentina, where unemployment is near 20 percent, owes $132 billion, mainly to bond holders.

Economists say that without international help, there's little hope the South American nation can avoid history's worst debt default from a sovereign nation.


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