By Marcela Valente
BUENOS AIRES, May 27 2002 (IPS)

Argentina’s President Eduardo Duhalde won the backing of provincial governors from his Justicialista (Peronist) Party on Monday after warning them that the country’s economic crisis is accelerating and that “time runs out this week” for complying with the International Monetary Fund’s conditions.

The president’s meeting with the governors, held in the central province of La Pampa, concluded with the signing of a declaration of support for the Duhalde administration, with 12 of the 14 Peronist governors putting the signature on the document.

Governors Néstor Kirchner, of the southern province of Santa Cruz, and Alicia Lemme, of the central province of San Luis, refused to sign the declaration.

The two are the most outspoken in demanding early elections, a possibility that their colleagues have ruled out. The next presidential elections are slated for September 2003.

In the document, titled “We can delay no longer”, the 12 governors expressed their “full support” for the president’s efforts to govern amidst the crisis and committed themselves to “urgently” advancing the economic adjustments the IMF demands before it will disburse financial aid.

The governors decided to put off debate about convening early elections. “Nearly all of us share the idea that first we must make an effort to pull Argentina out of crisis, because – if we don’t – the elections would push the country into chaos,” said Duhalde.

The president and the governors reportedly considered it best that Duhalde reach a financial aid agreement with the IMF and that he find a way to end the so-called “corralito” (little fence), which strictly limits savers’ access to their bank accounts. After those objectives are reached, early elections may be considered.

Duhalde must complete these pending tasks “before ceding to any request for early elections,” stated Juan Carlos Romero, governor of the northwestern province of Salta.

Opposition lawmaker Elisa Carrió, who leads in some polls as a potential favourite presidential candidate, described the president’s meeting with the governors as “a farce”.

The governors are asking Duhalde to “do the dirty work” of complying with the IMF requirements before he leaves the presidency, said the centre-leftist Carrió.

Duhalde himself had said Sunday that it would not make sense to move up the elections because, in his opinion, the crisis would devour anyone who attempted to administer the process.

“The president chosen in elections would suffer the same things I am and would rapidly wear out,” he said.

In a bid to recover lost momentum, Duhalde said as the meeting began Monday that “time is running out” and that the commitment the governors signed last month to cut expenditures and demand that lawmakers reform the laws as requested by the IMF “must be met right now.”

The 14-point agreement reached Apr 23 has only been partially obeyed, in spite of the urgency of the national crisis.

The IMF stipulated conditions for the disbursement of emergency funds, including reform of the bankruptcy law (already approved), the annulment of the economic subversion law (debate is scheduled in the Senate on Tuesday), and an agreement between the national government and each of the provinces aimed at reducing the fiscal deficit 60 percent.

These agreements so far have been signed by only eight of the country’s 21 provinces. Duhalde is urging the Senate and the governors to speed up action to annul the law on economic subversion – which permits court trials for financial crimes – and to sign the remaining provincial accords.

“I will not admit the possibility that by the end of this week no agreements with the remaining provinces have been signed” or that the economic subversion law remains in place, Duhalde told a press conference after the meeting in La Pampa.

The Peronist governors met with Duhalde in April, when the crisis had led to the resignation of Economy minister Jorge Remes Lenicov.

The president was tempted at the time to break ties with the IMF, but the governors said their support for his administration was conditional on maintaining negotiations with the multilateral financial organisation.

But in spite of the agreement reached last month, according to Duhalde, “the crisis is advancing at 100 km per hour and the solutions are arriving very slowly.”

Monday’s meeting of the president with the governors was organised by the governor of La Pampa, Rubén Marin, head of the Justicialista Party’s National Council. But the Duhalde administration quickly assumed the command and was able to influence the agenda.

The possibility of moving up the elections did not disappear from the agenda, but took backseat to the urgent need of the governors’ support for Duhalde, at least until he achieves an agreement with the IMF and a solution to the banking restrictions.

Meanwhile, Argentina’s savers demonstrated Monday once again outside the main offices of several different banks. This time there were clashes between the police and some 20 protesters in front of the Banco Francés-Bilbao Vizcaya, resulting in the arrest of four women.

The current Economy minister, Roberto Lavagna, presented the governors with a plan that would allow savers to exchange their deposits for five- or 10-year bonds in dollars, and to use certificates for acquiring certain goods, though at market prices.

The Argentine peso was trading at 3.45 per dollar on Monday. For more than 10 years, ending in January, the peso had been pegged at one-to-one parity with the dollar.

Lavagna’s initiative has the support of the national banks, both public and private, but not of the foreign banks, whose executives complain that it would not compensate their institutions for providing bonds in dollars for deposits or for collecting on loans in pesos.

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