Argentina's President Eduardo Duhalde has reached an agreement with provincial governors to slash government spending and help the country emerge from its economic crisis.

Under the agreement reported Friday, the federal government could save almost one billion dollars a year through a series of government downsizing reforms, including the reduction of the number of the country's lawmakers by one fourth.

In addition, councilmen in municipalities with fewer than ten-thousand inhabitants would stop being paid by the government, and would have to work as volunteers.

Currently, there are about 18-thousand lawmakers in Argentina -- a nation of just 36 million people. Argentina's Congress still needs to approve the plan.

Meanwhile in Ottawa Friday, Canadian Finance Minister Paul Martin says he hopes Argentina will work closely with the International Monetary Fund to revive its economy. He spoke at the start of a session of finance ministers from the world's richest countries.

Reducing public spending is considered crucial, as Argentina prepares to negotiate with the I-M-F for a new loan package. But analysts say the reforms are critical also for satisfying angry Argentineans, who view their political system as corrupt and responsible for the country's economic disaster.

The proposed reforms also include changes in Argentina's electoral system. Government officials say they hope the reforms would go into effect before 2003, when the term of President Duhalde expires.

(ap, reuters)

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