Support for Argentina’s Duhalde Shrinks in His Peronist Party

BUENOS AIRES — Unable to persuade even members of his party to support a series of economic reforms demanded by the International Monetary Fund, Argentine President Eduardo Duhalde faced new doubts this week about his ability to govern this teetering South American country.

On Friday, the governor of Buenos Aires province, Felipe Sola, sounded the latest note of discord within the ruling Peronist party. Sola said he would insist on bypassing Duhalde’s government so he could negotiate directly with the IMF, which is asking for draconian budget cuts in provincial spending as a condition for emergency loans to Argentina.

“It’s important that Buenos Aires explain a few things directly to the IMF,” Sola said. “The country is under siege because of the mistakes” made by Duhalde’s economic team.

The struggle between Duhalde and his party is expected to come to a head Monday when he is to attend a summit conference with Peronist governors in rural La Pampa province. Peronists control most of the nation’s largest provinces.

Gov. Juan Carlos Romero of Salta province, another Peronist, added his voice Friday to the chorus of politicians criticizing Duhalde.

Romero said he was troubled by the “uncertain direction” of Duhalde’s rule, which has been marked by flip-flops and policy failures as the president wrestles to undo the knot of Argentina’s economic crash.

Since he was appointed president by the National Assembly in January, it has become clear that Duhalde serves at the pleasure of the most powerful leaders of the Peronist party.

Argentina is entering its fifth year of recession, with the official unemployment rate at 25%, its devalued currency worth less than a third of its January value, and inflation galloping toward an annual rate of 90%.

The IMF and other international agencies have been reluctant to grant Argentina further loans after it defaulted on part of its $141-billion public debt.

After returning Wednesday from a trip to Europe, Duhalde appeared eager to bring to a close a months-long effort to implement the IMF reforms. He said he would step down if the measures weren’t approved quickly, but his spokesman said a day later that the president wasn’t threatening to resign.

On Thursday, the Peronists struggled to get a quorum in the Chamber of Deputies to vote on the proposed revisions to “the law of economic supervision,” which punishes executives whose business decisions harm “the national interest.”

The law has recently been invoked by judges investigating whether bankers illegally withdrew billions of dollars from the troubled banking system. The IMF made repeal or revision of the law a condition for further aid, arguing that the law discourages investment in the country.

But Duhalde’s opponents see overturning the law as an unpatriotic surrender to outside interests.

When the vote was taken, a dozen Peronist deputies had broken with Duhalde and voted against his proposed reforms. The measure was defeated 102 to 99.