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President's Resignation Leaves Argentina on the Brink
December 24, 2001
Summary
Argentine citizens this week began venting their anger at the government's failed economic policies. Twenty-two people have been killed after more than a day of looting and rioting, which culminated late Dec. 20 with the surprise resignation of President Fernando de la Rua. Argentina is now effectively left ungoverned, and this will accelerate a massive debt default and a devastating devaluation of the peso. An extended period of political and social chaos will make it extremely difficult for the next government, which likely will be led by the Peronists, to tackle the country's massive economic problems.
New president Mr Rodriguez Saa said he would not devalue the peso (More).
Photo Credit: The Associated Press.
Analysis
A rising tide of protests against the Argentine government's economic policies turned violent Dec. 19 and 20, as thousands of citizens took to the streets of at least six major cities. Twenty-two people have died in 36 hours of rioting that prompted the government to declare a state of siege. Economy Minister Domingo Cavallo, once considered an economic miracle worker, resigned his post Dec. 19, followed by the rest of the Cabinet.
In a last ditch effort to save his government, President Fernando de la Rua approached the opposition Peronists about forming a national unity government, but they declined to enter into a coalition. Recognizing his complete powerlessness, de la Rua resigned late on Dec. 20.
This effectively leaves Argentina without a government. De la Rua's vice-president resigned in October 2000, taking his Frepaso party with him. Buenos Aires daily La Nacion reports that the Peronists, who have a majority in both houses of Congress, will name the president of the Senate, Ramon Puerta, as de la Rua's provisional replacement. National elections will then likely be called for early 2002.
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(c) 2001 Stratfor, Inc.
Dan
President's Resignation Leaves Argentina on the Brink . . .