Nicaragua to Cut Army, Government

THE new government of Violeta Barrios de Chamorro said Saturday it would lay off 10,000 soldiers and 15,000 state workers as part of an economic austerity program to reduce the fiscal deficit and save Nicaragua's failing economy. ``The army and the public sector will be reduced with the new measures,'' Economy Minister Silvio de Franco said. ``Ten thousand members of the army and 15,000 state workers will be placed in productive activities through programs that the government plans....''

Mr. Franco said worker layoffs and reducing the size of Army, which has already fallen by 35,000 members since President Chamorro assumed power, will help lower spending. Nicaragua has a $220 million a year deficit.

On Thursday, the government began a ``national dialogue'' with social sectors of the society, to discuss economic policy measures. The Sandinista union refused to attend the talks.

``We don't want to back the government's business dealings with the International Monetary Fund,'' said Daniel Ortega, leader of the Sandinista Front and former president. ``We cannot allow ourselves to legitimize measures against workers and peasants.''