Argentina entered a tense waiting period yesterday as power passed from the Radical party president, Mr Fernando de la Rua, to the opposition Peronists, after three days of social unrest, widespread looting and police repression that has left 27 people dead and more than 150 wounded.
Two Argentine judges have barred ex-president de la Rua from leaving the country pending an investigation into the suppression of the protests, court officials said.
Argentina's new government will declare a debt default, end the dollar-peso currency peg and implement social programmes to help the poor, sources within the Peronist party said last night.
Mr Ramon Puerta was appointed caretaker president yesterday after huge riots in Buenos Aires and several other cities forced Mr de la Rua to resign.
Mr Puerta said last night that the Argentine Congress will today name a provincial governor, Mr Adolfo Rodriguez Saa, as interim president. Mr Puerta, whose party controls the legislature, said that Mr Saa would to take the country to elections on March 3rd.
An eerie calm hung over the devastated shopping districts of Buenos Aires last night, as the promise of a change in leadership appeared to deflate the popular rage prompted by the outgoing administration's austerity measures. As relative calm returned, the state of emergency was lifted.
On Thursday night, crowds looted supermarkets, banks, restaurants and video outlets.
Some shopkeepers were too scared to reopen yesterday. "Many of the looters were our regular customers," said one shocked grocery store owner. "This is total anarchy."
With the police notably absent, neighbours took the law into their own hands, beating looters with sticks. The lawlessness created fears that democracy itself was in danger.
"The question here is whether democracy can withstand this blow; if not, the repression to come will be brutal," said a leading political columnist, Sylvina Walger.
In a last appearance before the press yesterday morning, the outgoing president said he failed to understand the motives behind the "attack against the downtown area", but refused to answer questions about police excesses.
Mr de la Rua said he was unable to continue after the Peronists turned down his offer to form a coalition government.
"I realised the time had come for me to resign," he said.
Economists, meanwhile, began fine-tuning a foreign debt moratorium and a "controlled devaluation" that are expected to become the cornerstones of the interim administration's economic programme. There were suggestions yesterday that Argentina could announce a one-year freeze on payments of its crippling $132 billion foreign debt.
The service of its debt has been costing Argentina some $8 billion a year, and some leading Peronists have long been demanding a moratorium to make that money available for attending the country's social ills.
Peronists blame the dollar parity for massive layoffs that sent unemployment to nearly 20 per cent in recent years.
But the Peronists' return will not please the thousands of middle-class protesters who took to the streets on Wednesday night. "If the Peronists return, then we're back where we started," said a woman cheering the president's resignation.
President Bush last night urged Argentina's next president to implement the austerity measures proposed by the IMF, saying this could clear the way for the lending agency to free up funding for the economy.
President Bush defended the IMF's policies in Argentina and its decision to withhold some funding.