Peronists Take Reins in Argentina

A provincial senator took power in Argentina on Friday, but only for a day, as uncertainty reigned in the wake of violent protests that drove the old government from office.

Ramon Puerta, head of the Senate, became president Friday morning after an extraordinary session of both houses of Congress accepted the resignation of Fernando de la Rua, whose presidency ended amid a flurry of looting and violence in which at least 25 people died and 1,200 were arrested.

Late Friday, it was announced that Puerta would hand over power today to a second interim president, Adolfo Rodriguez Saa, governor of the small province of San Luis in central Argentina.

As merchants and city workers cleaned up after two days and nights of rioting, millions of Argentines went to their banks, worried about the country’s economic future. They found some restrictions in place on what was officially a “partial bank holiday.”

Exchange houses were prohibited from selling U.S. dollars. Some Argentines accepted as inevitable the likelihood that a new government would eventually devalue the national currency, the peso, which is currently traded one-for-one with the dollar.

After days of mass protests that saw tens of thousands of people take to the streets, the country’s future was in the hands of a small number of politicians, all members of the Peronist party, which controls Congress.

The Peronists spent much of Friday in private meetings, trying to sort out who would hold power and for how long. Party leaders said Rodriguez will hold office only until March 3, when new elections will be held to pick yet another president, the fourth during Argentina’s turbulent summer.

Neither of the two interim presidents said publicly what steps they will take to turn around the troubled economy, currently sinking under the weight of a $132-billion foreign debt.

“We will make an announcement tomorrow,” Rodriguez told a crush of reporters late Friday, moments after Peronist leaders announced that he would be named president. “We will enter a new era of economic policy.”

Most experts here predicted a devaluation of the currency and other measures that could hit savings accounts. The Peronists were also expected to institute a new form of unemployment insurance to deal with the 18% of Argentines who are out of work.

Rosario Vasquez, 34, was among those rushing to get as much money out of the bank as possible Friday.

“I was able to get my check and Christmas bonus,” she said. (In Argentina, most salaries are paid directly into bank accounts.) “I wanted to take advantage because I have no idea what’s going to happen next week.”

World leaders expressed concern Friday about the events in Argentina.

Officials in Spain, France and five South American countries called on international financial institutions to come to the country’s aid.

“There has been a chain of political and economic errors, not just by the Argentines, but also errors by international financial institutions,” said French Foreign Minister Hubert Vedrine.

Bush administration officials, by contrast, have expressed doubt that more aid could rescue Argentina from its crisis.

President Bush told reporters Friday that any additional loans to the country would be contingent on its ability to meet the conditions dictated by the International Monetary Fund.

“Hopefully, the new president will do the austerity measures necessary to be able to protect the creditors, including the IMF, which is, as I understand it, willing to loan more money if the austerity measures are put in place,” Bush said.

But more budget cuts are anathema to the Peronists, who won a major victory in October’s congressional elections by promising to address the needs of the poor and the middle class, both hit hard by De la Rua’s “zero deficit” policies.

Among those vying for power in the March elections are expected to be Eduardo Duhalde, a senator who lost to De la Rua in the 1999 presidential elections, and Carlos Ruckauf, the governor of Buenos Aires province. Some De la Rua supporters blame Ruckauf for inciting the first food riots that preceded this week’s violence.

The coming months are likely to see a hard-fought battle between the Peronists, long known for producing colorful and controversial politicians. The last Peronist president, Carlos Menem, spent months under house arrest this year on arms trafficking charges.

On Friday, Argentines were treated to a day of especially absurd political theater.

De la Rua arrived at the Pink House presidential offices in the morning to make official his resignation and talk to the media. He blamed his fall on the Peronists’ unwillingness to join him in a government of national unity.

In his last official act, De la Rua lifted the nationwide state of siege he had declared Wednesday.

Minutes later, Puerta signed the document that made him president. He then reinstated the state of siege.

A 50-year-old senator from the rural northern province of Misiones, Puerta made a fortune selling yerba mate, an herb that Argentines brew into a strong tea.

“I’ve never occupied a position I wasn’t elected to,” Puerta said in his first news conference, striking the diffident tone of a man with no intention of being anything more than a caretaker. Among other things, he refused to don the presidential sash.

“I will fulfill my mission in this difficult moment for the republic, as is my responsibility,” he said.

Puerta said he was inclined to fill out the rest of De la Rua’s aborted four-year term, which would have made him president until 2003. But he said that a majority of leaders of the Peronist party felt that only a leader with a strong mandate--in short, an elected one--could implement the drastic economic measures necessary to rescue Argentina from the fiscal abyss.

Puerta later named as interim Finance Minister Oscar Lamberto, a senator and accountant by training who is considered one of the Peronists’ leading economic thinkers.

Lamberto made few public statements Friday. For most of the day, no one answered the phone at the Finance Ministry’s media office.

The official silence only added to the sense of impending doom on the streets of Buenos Aires. Many automated teller machines would not dispense cash, and most banks operated with skeleton staffs.

“They say that I can take out my money but that they don’t have any cash,” said Jose Castro, 31, who was trying to withdraw his paycheck at a Citibank branch.

“It’s my money, but they won’t let me withdraw it.”

Late Friday, news reports said that a Korean Argentine couple committed suicide, a day after their Buenos Aires grocery store was ransacked by a mob.

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Argentina’s Financial Crisis

Argentina has been rocked for months by fears that a deepening recession, now in its fourth year, could lead the country to devalue its currency or default on $132 billion in debt. A chronology of key events in Argentina’s financial crisis:

Dec. 10, 1999: Fernando de la Rua inaugurated as president after campaigning on promises to revive the economy and root out corruption after 10-year rule of Peronist President Carlos Menem.

* May 29, 2000: Argentina announces $938 million in spending cuts. Two days later, 20,000 people march to protest the cuts.

* Dec. 18, 2000: Government announces $40-billion aid package led by International Monetary Fund. Markets post strong rally.

* March 20-21, 2001: De la Rua appoints Domingo Cavallo, leader of a small conservative party, as the new finance minister. He pledges new austerity.

* July 3: Argentine stocks fall to 28-month low on rumors of the resignation of De la Rua, after a governor in his own party says the president is “overwhelmed” by the political and economic problems affecting the country.

* July 11-26: Three rating agencies slash Argentina’s credit standing.

* Aug. 21: IMF Managing Director Horst Koehler agrees to recommend an $8-billion increase in Argentina’s $14- billion standby loan agreement. Depositors begin to return cash to local accounts.

* Dec. 1: Cavallo announces sweeping restrictions to halt a bank run that some fear could sink the economy. The measures include a monthly limit of $1,000 on cash withdrawals and caps on offshore transfers.

* Dec. 2: Argentina says it will accept $50 billion in debt restructuring.

* Dec. 5: IMF announces it will not disburse $1.3 billion in aid to Argentina.

* Dec. 13: Government says jobless rate rose to 18.3% in October, the highest since the start of the recession in mid-1998. Major unions call nationwide strike.

* Dec. 14: Finance Secretary Daniel Marx says he’s leaving his post but will continue to head debt-restructuring talks.

* Dec. 17: Government presents 2002 budget that includes spending cuts of nearly 20%.

* Dec. 19: Government declares a state of siege, giving it special powers to stop looting and riots sparked by austerity measures and poverty. Cavallo resigns a day later.

* Dec. 20: De la Rua resigns.