Chavez Gets Powers to Rule by Decree (PM Newspapers- 'Heil Hugo')

CARACAS (Reuters) - Venezuela's Congress on Wednesday granted President Hugo Chavez powers to rule by decree for 18 months as he tries to force through nationalizations key to his self-styled leftist revolution.

The vote allows anti-U.S. leader Chavez, who has been in power since 1999, to deepen state control of the economy and other sectors of public life such as defence and security.

Chavez's increasing centralization of power in the No. 4 oil exporter to the United States prompted rare public comments from U.S. President George W. Bush.

"I'm concerned about the Venezuelan people, and I'm worried about the diminution of democratic institution(s)," he said in an interview with Fox News to be broadcast later on Wednesday, after being asked about Chavez's nationalizations.

Afternoon headlines in the anti-Chavez press were more scathing. Tal Cual splashed with "Heil Hugo" and equated the enabling law with powers granted to Nazi leader Adolf Hitler in the 1930s. El Mundo had the headline "Superchavez enabled."

The lawmakers, all loyal to Chavez after opposition parties boycotted the 2005 congressional elections, flaunted their populist credentials by taking the unusual step of holding their vote in public in a square in downtown Caracas.

"We in the National Assembly will not waver in granting President Chavez an enabling law so he can quickly and urgently set up the framework for resolving the grave problems we have," said congressional Vice President Roberto Hernandez.

The economic reforms are set to work in tandem with increased political centralization. Chavez is forging a single party to lead his radical reforms, stripping the central bank of autonomy and seeking indefinite re-election.

The vote was applauded by hundreds of Chavez supporters in red T-shirts, carrying placards such as "With Chavez, the people rule" and "Venezuela towards socialism."

Chavez has targeted the oil industry, power utilities and the country's biggest telecommunications firm for takeover, affecting many foreign owners and shareholders.