Alfonsin to Finish Term in Argentina, Battle Inflation

A newly forceful President Raul Alfonsin declared Tuesday that he will serve out his term rather than hand over power early to his Peronist successor, and he pledged “a war economy” to fight raging inflation.

“What is certain is that we are resolved to govern without dismay until Dec. 10, so no one should come and say that what might happen is reason for an earlier hand-over,” the president said in a nationally broadcast address.

Alfonsin said President-elect Carlos Saul Menem’s negotiators backed down from an apparently firm agreement on an emergency economic package to reduce runaway inflation, which was to accompany the transition.

Menem denied that the Peronists had broken a deal with Alfonsin’s ruling party, the Radical Civic Union, and said he is still willing to talk but “without committing ourselves to short-term measures that work against the people.”

He said Alfonsin’s speech was “more or less adequate under the circumstances” and added, “I prefer that the president depart without resigning and with all the honors that are due to a man who has fought for democracy.”

Plans Bold Action

Alfonsin, who has appeared discouraged and directionless in recent weeks, promised a bold new style “which is not to my taste”--a tough, demanding campaign, using government-run media, to get the economy under control.

The standoff left the country where it stood in the days after Menem’s May 14 trouncing of the Radicals’ candidate, Eduardo Cesar Angeloz: facing an uncertain seven months under a lame-duck administration with the currency crashing and annual inflation of more than 8,000%. Meat prices soared by more than 80% this week alone.

The Radicals had sought an accord with the labor-based Peronist party for higher taxes, exchange controls and other measures to restore order. Economy Minister Juan Carlos Pugliese had acknowledged that without the Peronists’ support, any program imposed by the Radicals was doomed.

Menem’s advisers, anxious not to spend their political capital on a risky venture even before Menem takes office, insisted they would not co-sponsor any plan. Menem, governor of the small province of La Rioja, said he opposes higher taxes and fees and wants salary increases for workers whose buying power has been decimated by the unprecedented inflation and more aid for the bankrupt provinces.

Alfonsin said he failed to understand how the Peronists could hope to increase both salaries and provincial funding while refusing to approve ways to raise the money to do so.

The 62-year-old president, who oversaw the transition from a seven-year dictatorship to democratic rule after taking office in 1983, noted that no other Argentine president has ever handed over power to an elected successor from another party.

“I had a great dream, as you know, because I have referred to it many times: to complete the mandate of six years,” he said. In accepting the notion of shortening the transition, Alfonsin said he took into account that “the mission was completed, we had already had the elections, there was already a president-elect and the consolidation of democracy was practically a reality.”

‘Homage to Democracy’

“Of course it was painful, but it was called for in homage to democracy itself,” he added.

Following the failure of that effort, “We are going to create not only a war economy but a crisis government. . . . We are going to carry forward a program with social awareness, but it will of course be tough, as everyone can imagine.”

He said the currency exchange market will be closed for the rest of the week to allow the Radicals’ economic team to complete the emergency package, which is to be announced by Sunday. All Cabinet members resigned Tuesday night, and Alfonsin is expected to make some changes.

Congressman Eduardo Bauza, Menem’s chief negotiator, told reporters that Alfonsin sought “to shift to us the blame for the current situation without accepting any of the responsibility for it.”

He said that “in the face of this arrogance of the government, we cannot continue negotiating. . . . The economic measures that they take are the risk of the Alfonsin administration.”

A Radical legislator involved in the talks said privately that “every 15 minutes they (the Peronists) changed negotiators and negotiating themes. They viewed our act of grandeur as weakness.”

He added that some Peronists wanted a broader accord, including an agreement to end trials of military officers for human rights violations, a constant disruptive factor during Alfonsin’s administration.