Argentine Democracy Faces Debt Problems, Trouble from Unions

WSJ, 2/24/84, Neil Ulman

Summary by Josef Skoldeberg

Main Point: After only two months in office the new governments honeymoon is quickly coming to an end. The new government is having to deal with stand offs with trade unions run by Peronist(the political party founded by dictator Juan Peron) leaders, the huge foreign debt of the country, and the after math of a brutal military regime. But there is hope seeing as how this is the first government in 50 years to be recognized by all Argentines as legitimate.

Summary: There is a stand off between the trade unions and the new government going on. The government wants to implement new rules for elections within unions and increased minority representation. However the Peronists see this as a huge threat since most of the new leaders that will be elected will not be Peronists but instead will be Radical Party(the current ruling party) supporters. There have been huge demonstrations for and against the changes to the unions

The country is having a very difficult time dealing with the aftermath of the old military regime. Throughout the years people regularly disappeared from the streets of Argentina. They were taken for various reasons by the military. The public is now finding out about the concentration camps, mass graves and torture houses that existed for years. A commission has been set up to investigate individual cases and many military leaders will be court martialed but the trials will take years to complete.

The problem that overshadows almost everything else is the countries debt crisis. Inflation ran at 12% over the last year and the budget deficit stands at about $10 billion. That is roughly 14% of GNP but some say it may be as high as 23%. At this point the country is $2.7 billion behind on interest payments on its foreign debt. A daunting task lies ahead of the new government to try to restructure the current debt and secure more loans so the country can pursue its ambitious economic stimulus plans.