Please take that flag off my desk

Eduardo Camano Chairman of the lower house

After an angry day in the country's Congress on Thursday, the government gained partial support for legal changes demanded by the IMF before it releases economic aid.

The lower house eventually passed a measure to amend the country's bankruptcy law, but not before a brawl had broken out among legislators.

The bankruptcy law has been criticised by the IMF because it favours the rights of debtors over creditors.

Resistance

The changes to the law also include a "cram-down" clause which will allow creditors to take over a distressed company.

President Duhalde and his economy minister are keen to appease the IMF

Argentine lawmakers had resisted amending the law because they believed that the "cram-down" clause would allow foreigners to take over local companies.

The new measures will be passed to the Senate at 1400 GMT on Friday.

President Eduardo Duhalde is desperate for speedy approval of changes demanded by the IMF to win billions of dollars in foreign aid.

Rebellion

However, the lower house is not proving entirely compliant, and it plans to block efforts by the Senate to abolish a controversial "economic subversive" law.

The measure was originally introduced in 1974 to prevent leftist guerrillas from receiving funds.

"The Senate abolished the economic subversive law, but here we will not ratify that," said a spokesman for Eduardo Camano, chairman of the lower house.

The IMF wants the law abolished before it will consider resuming talks on providing financial aid.

Argentine judges stirred up controversy when they recently used the law to question foreign and local bankers about the movement of capital outside the country.

The Senate also voted to amend the penal code to introduce harsher punishments for disruption of business or attempts to bring down the value of commodities or goods.

Brawls in the house

The IMF demands have angered many Argentines because they view the organisation as US-dominated and feel that their leaders are kow-towing to Washington.

Half of Argentines are living in poverty

On Thursday, during the debate in the lower house on the bankruptcy law, legislators lunged at each other after a US flag was thrown onto Mr Camano's desk.

Dissident deputy Alicia Castro had mocked the government by asking colleagues to replace the Argentine flag with the unfurled US flag.

"Please take that flag off my desk," Mr Camano had retorted.

A skirmish followed after Mr Camano asked deputies to vote for Ms Castro's expulsion on charges of misconduct.

The session only returned to normal after Mr Camano withdrew his request to sanction Ms Castro.

Economic woes

Argentina's economy has been in the doldrums for several years and reached crisis point last December when mass protests hit the streets.

Argentines have been prevented from accessing their savings and nearly half of the population lives in poverty.

At the end of April, the country appointed its sixth economy minister in 12 months.

Free-market economist Roberto Lavagna became the new economy minister after Jorge Remes Lenicov was forced out of office.

The Argentine Congress had refused to back Mr Remes Lenicov's plan to convert savings into bonds.