POLITICS-ARGENTINA: Turmoil Builds with Strike, Economic Crisis

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Jun 9 2001 (IPS) - Political tensions multiplied Friday in Argentina with a strike convened by two major unions, the hospitalisation of President Fernando de la Rúa and the simmering crisis of Aerolíneas Argentinas.

Just one day before, Argentines were stunned by the arrest of former president Carlos Menem, leader of the opposition Justicialista (Peronist) Party, for the illegal sales of arms to Croatia and Ecuador during his presidency (1989-1999).

The potential political advantage analysts predicted the De la Rúa government might have obtained from the Menem arrest, which underscored the Judiciary’s independence, seems to have dissipated due to the persistence of Argentina’s severe economic crisis and its social impacts.

Political experts have said that the arrest of any former official on corruption charges would prove that, under the current government, justice authorities act with complete autonomy.

The governing coalition and the communications media in general seem to agree that the De la Rúa administration stands in sharp contrast to the 10-year reign of Menem, when they say the Executive branch controlled the judges.

But union protests Friday clouded the potential political benefits De la Rúa might have enjoyed as a result of Menem’s arrest, the first former president in Argentina to be arrested during a democratic government.

Friday marked the fourth general strike against the government’s economic policy since De la Rúa took office Dec 10, 1999. The mobilisations were organised this time around by the dissident faction of the General Confederation of Labour (CGT) and by the Congress of Argentine Workers (CTA).

The demands enumerated in the protest – which did not have the support of the main CGT organisation – included an appeal to resolve the crisis afflicting Aerolíneas Argentinas, the local flagship airline that is on the verge of bankruptcy and which was privatised under the Menem government. The firm now belongs to SEPI, a Spanish holding firm.

Though De la Rúa and his ministers attempted to minimize the importance of the strike, it received widespread support from workers, especially among the public transportation, school and hospital sectors. Similar protests were also reported in other cities throughout the country.

Truck-driver Hugo Moyano, leader of the dissident CGT, was the first to call for a strike against the government for the economic policy line it is following. The CTA announced its support for the protest just days ago.

In the end the organisers put the situation of nearly 7,000 Aerolíneas Argentinas employees at the top of their list of demands.

As a result, many protesters gathered outside offices of the Spanish-owned companies that have invested heavily in Argentina, such as the Telefónica headquarters, where they set up numerous “people’s canteens.” Repsol, the oil company that acquired the formerly state-owned YPF three years ago, was the target of hundreds of eggs thrown by demonstrators.

Other protests took place outside the Argentine banks that have been taken over by Spain’s Bilbao Vizcaya and Santander Central Hispano, the pension-administrating firm Consolidar, the Endesa energy company and Iberia airlines.

The union leaders launched a public appeal to boycott the products and services of Spanish-based companies.

Spain is the leading foreign investor in Argentina, but the crisis at Aerolíneas Argentinas, seen as a national symbol, has triggered a conflict between the two countries because they have been unable to find a way to prevent the airline’s closure.

Wednesday, Menem’s legal situation pushed to the background the decision taken by the SEPI holding company to suspend Aerolíneas’ international flights.

The airline has not paid its workers since April and has accumulated millions of dollars in debt with its suppliers of fuel and of key services, such as on-board catering.

The tense panorama has stolen the spotlight from outspoken Economy minister Domingo Cavallo’s efforts to alleviate the country’s financial problems.

This week Argentina finalised a foreign debt bond swap, extending the amortizations of billions of dollars in titles that come due within the next four and a half years. But the operation turned out to carry much higher costs than expected.

Economists report that the financial relief obtained through the debt swap cost an interest rate averaging 15.4 percent annually, though it gives the De la Rúa government breathing room for its efforts to reactivate the economy.

Argentina suffers a recession that is nearly three years old and unemployment has risen from an already high 14.7 percent to 16 percent.

The investment risk index for the country has begun to show favourable changes over the last few days, but this item of good news was largely overlooked Friday, as the public’s attention was focused on the strike, the possible closure of Aerolíneas and Menem’s arrest.

Another attention-diverting factor was the hospitalisation of De la Rúa, a decision taken by the president himself, reportedly to undergo routine medical tests in order to determine the state of his health in general and his circulatory system in particular.

Meanwhile, his predecessor, Menem spent day one under house arrest at a comfortable residence in the town of Don Torcuato, in Buenos Aires province, accompanied by his new wife, Chilean television personality Cecilia Bolocco, as well as other friends and former officials.

Federal judge Jorge Urso was responsible for the order to arrest Menem based on investigations of the former president’s alleged role in an “illicit association” created to smuggle weapons to Ecuador and Croatia between 1991 and 1995.

Several former officials have already been arrested in the arms trafficking case, including Emir Yoma, Menem’s former brother-in- law and adviser, former Defence minister Antonio Erman González and former army chief Gen. Martín Balza – all implicated as organisers of the alleged “association.”

In the next few days the judge will have to decide on the legal status of the former president being held in custody, as well as that of the 46 other people who have been indicted in the case. Once Urso has issued a ruling, the investigative phase of the proceedings end and oral hearings begin.

Though the legal process is far from over, debate began among Argentines about the possibility of a presidential pardon for Menem if he is found guilty.

De la Rúa has so far avoided expressing an opinion about the arms trafficking case, but his Interior minister, Ramón Mestre, acknowledged that a future pardon is a possibility.

“Certain circumstances would have to be met, but given the pardons granted to former dictators and former terrorists, there is no reason to rule out an initiative of this type,” said Mestre.