Da: "Nello Margiotta" A: Oggetto: Fw: Argentina Crisis Data: giovedì 13 dicembre 2001 14.10 Wednesday, December 12, 2001 Washington Post HIS STATURE HURT IN CRISIS By Anthony Faiola Washington Post Foreign Service BUENOS AIRES, Dec. 11 -- As Argentina stands on the brink of financial collapse, the fate of the nation more than ever rests on the shoulders of its president, Fernando de la Rua. That is why Argentines are panicking. De la Rua, 64 and a career politician, swept into office two years ago on a campaign slogan that celebrated his reputation as boring but reliable. But he is now viewed by many Argentines as an indecisive figurehead whose inability to lead has played a major role in the looming crash of Latin America's third-largest economy. His parliamentary coalition is largely shunning him. His strong-willed economy minister, Domingo Cavallo, appears to call most of the shots. Cavallo has even delivered key national addresses once considered the purview of the president. As a result, de la Rua has come to be seen as an overwhelmed, tragic, even superfluous leader. He is savaged on television shows and in political cartoons and is jeered during appearances. He confronts single-digit approval ratings in opinion polls. Argentines have even invented a new Spanish verb -- delarruizar -- for being trapped in indecision and confusion. De la Rua's failure to muster support among powerful elements in his center-left Radical Civic Union party, as well as among the opposition Peronists, has fueled a building political crisis. The political drift, experts say, is playing a central role in exacerbating the economic crisis that has already put Argentina on the verge of default and a potentially devastating currency devaluation -- events that could jolt economies throughout Latin America. De la Rua's electorate has lost faith in his ability to manage the crisis, staging a massive run on banks two weeks ago that forced the government to freeze accounts to prevent an immediate collapse of the financial system. Additionally, doubts about de la Rua's ability to deliver on promises to rein in spending and reach a political accord on a balanced budget for next year were a key factor in the International Monetary Fund's decision to suspend a $1.24 billion loan to Argentina this month. On the boulevards of this grand capital -- now tarnished by unemployment and poverty after four years of recession -- Argentines openly wonder whether the threat of ruin will lead to de la Rua's early resignation. De la Rua is already forced almost daily to publicly deny that he is losing his ability to govern and should step aside. Many Argentines also chide de la Rua for his choice in advisers, chief among them his 28-year-old son, Antonio, who is best known for being the boyfriend of Shakira, a Colombian pop star. The opposition Peronists say publicly they have no interest in ousting de la Rua. But the party broke last month with a long-standing Argentine tradition of electing a member of the president's party as head of the Senate. With Peronist votes, the upper house instead elected Ramon Puerta, a Peronist senator from the rural province of Misiones, to replace de la Rua if he does not complete his term. Most analysts here say de la Rua benefits from the fact that virtually no politician is eager to immediately wear the presidential sash given the tenuous economic situation. But a major financial disaster such as a devaluation, which is likely to cause a string of corporate and personal bankruptcies, could generate a larger wave of social unrest that may yet oust de la Rua from power, experts say. "The truth is that Argentina's crisis is as much political as it is economic," said Rosendo Fraga, a political analyst in Buenos Aires. "There is a power vacuum. De la Rua has proven unable to lead. And if there is a devaluation of the currency, de la Rua's government will not survive." Rather than raise questions about the strength of Argentine democracy, restored in 1983 after a seven-year dictatorship, de la Rua's perceived weakness has generated a debate about the quality of politicians who have emerged since then. Former president Raul Alfonsin, a member of de la Rua's party, assumed the presidency in 1983, but was forced to call early elections after he led the economy into hyperinflation and bloated state spending. He was followed by the flamboyant Carlos Menem, a Peronist who did an about-face and embraced free market reforms in the 1990s. But Menem's 10-year administration was also marred by overspending, as well as corruption. He was jailed in June for trafficking arms while serving as president, but was released last month after a successful appeal before the Supreme Court. As de la Rua attempts to rally politicians, his efforts have been hemmed in by leaders from inside and outside his party -- including Menem and Alfonsin -- who seem more bent on gaining popularity points than generating political consensus. "We are a country that has been damned by bad leaders," fumed Rodolfo Giletta, 68, a retired lawyer, who was waiting in a line at a bank for two hours this week, desperate to get at life savings that were largely frozen by the recent government measures. With the peso -- pegged to the U.S. dollar at a 1-to-1 ratio since 1991 -- already trading on the black market at 60 cents to the dollar, Giletta said he feels certain he will watch the value of his savings evaporate if an official devaluation comes. He blamed de la Rua and Argentina's entire political class. "De la Rua can't lead; Menem robbed the country blind; Alfonsin was a nice guy but a horrible administrator," Giletta said. "The only legacy they have left us is a disaster for the common man." Cavallo created the 1-to-1 peg to the dollar to fight hyperinflation under Menem and was brought back by de la Rua last April in a last-ditch effort to save the economy. Since then, he has come to be seen as the president's best asset, but also his biggest problem. Cavallo, a Harvard-educated economist with a hotheaded manner, has managed to irritate almost everyone, from de la Rua's coalition to the Peronists to the IMF to the average Argentine. The clamor for Cavallo's resignation is reaching a fever pitch, but analysts fret that his departure would widen Argentina's political void. Only the most partisan wholly blame de la Rua for Argentina's woes. Most Argentines just blame him for failing to end them. The tall, aristocratic de la Rua came to power in 1999 on a promise of honesty, and few charge him or his administration with corruption. Many add that de la Rua inherited an untenable situation from his predecessor, Menem, whose legacy of excess left a time bomb. De la Rua, who receives regular treatment for a heart condition and who looks more worn out and is more soft-spoken than ever, conceded recently that "the reality [of the crisis] is more stubborn than I thought, and it is harder to emerge from this downward slope than I imagined." But he still defends himself by saying he is untangling Menem's mess. "I have spent the last two years putting out fires," de la Rua told reporters recently. He added later, "There will be no default, no devaluation. I will do whatever I have to do to lift up the nation." Copyright 2001 The Washington Post Company. 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