Even Santa's short of money in Argentina

Police action is now being investigated

Rodriguez: How long can he keep smiling?

President Fernando de la Rua was forced to step down on Thursday after violent street protests over the government's handling of the economic crisis, which left more than 20 people dead. Two judges have barred Mr de la Rua from leaving the country, as an investigation is launched into police conduct in dealing with the disorder Police on horseback charged demonstrators and looters, pummelling them with water cannon and volleys of tear gas - often firing directly at protesters. More than 2,000 people were arrested nationwide.

US appeal
The announcement of an interim president came as US President George W Bush urged the country's new leader to push through an austerity adjustment programme proposed by the International Monetary Fund. But Mr Rodriguez has indicated that he wants to discuss a default on Argentina's $132bn debt.

"We have to sit down and negotiate with the country's creditors," he said, speaking before he was nominated to the interim presidency. "We must formulate an austerity plan and not an adjustment programme, which the country cannot take." A default would in effect cut off any lifeline from the International Monetary Fund and send Argentina spiralling even deeper into economic crisis. Oscar Lamberto was named new economy minister, after Domingo Cavallo's resignation, but it is unclear how long he will remain in office.

Default fear
Fifty-year-old Mr Rodriguez is governor of San Luis province, one of only two in the country that enjoys a budget surplus. He has yet to detail his economic policy for the country's current crisis. One option would be to end the system tying the Argentine peso at parity with the US dollar. That would mean a devaluation and almost certainly a debt default. The BBC's Tom Gibb says the big problem is that many ordinary Argentines have mortgages and other debts in dollars, as do businesses and farms. But they earn money in pesos - so a devaluation would only increase the size of their dollar debts. The Peronists have suggested converting these debts into pesos, but our correspondent says that this would be massively expensive and no one has explained how it would be funded.

Emergency reimposed
In his last act in office, President de la Rua lifted the state of emergency, which had been imposed on Wednesday after the worst unrest since Argentina's return to democracy in 1983. But the state of emergency was reimposed later on Friday in Buenos Aires province by acting President Ramon Puerta, after reports of some looting around the capital.

By Friday evening, however, the country was reported calm. Mr Puerta was appointed to head the government for 48 hours after Mr de la Rua's departure. The president blamed the crisis on the Peronists for refusing his offer to form a government of national unity. Mr de la Rua's departure drew cheers from protesters and some danced in the streets. Public fury had been sparked by government austerity measures aimed at reviving the economy, plagued by huge debts and unemployment at almost 20%. Similar unrest marked the last financial crisis in Argentina in 1989, forcing the then President, Raul Alfonsin, to leave office early. Argentina has been in a recession for almost four years. Earlier this month, the IMF refused Argentina a further $1.3bn in standby loans, unless it balanced its budget for the year 2002.