Fernando de la Rua, president between 1999-2001.
Following the growing questioning of the government of Carlos Menem, based mainly on the corruption and inability to combat the scourge of unemployment, an emerging political force was formed after an agreement between the Union Civica Radical (UCR) and Frepaso, a confederation formed by the party Frente Grande, Popular Socialist, Social Democratic, Christian Democratic and Intransigent. In 1997 this unit was specifically through the creation of the “Alliance for Work, Justice and Education”, better known as “Alliance.”
From their ranks came Fernando de la Rua made-Chacho Alvarez, winner of the presidential election held on October 24, 1999 with 48.5 of the vote and a lead of 10.5 over the official Eduardo Duhalde.
On December 10, made the Alliance took power in a climate of hope, even among many who had not voted. However, since his assumption, De la Rua began to undermine his political base by announcing the need for a series of tax hikes and adjustment of the state structure of considerable magnitude.
The cabinet of ministers, in the end extremely unstable, was composed by, among others, Jose Luis Machinea in the Ministry of Economy, Ricardo Lopez Murphy Defense, Adalberto Rodriguez Giavarini on Foreign Relations, Juan Jose Llach in education. He was a cabinet composed of radicals, and even Frepaso Cavallo, and with a lot of economists.
Argentina location in the economic and social situation was very delicate one and that unemployment went well beyond the 15 , and climbed relentlessly, insecurity in the streets, mistrust on the part of international financial markets and a large external debt were among the main topics urgent to address the government’s agenda.
The Ministry of Finance had set certain financial measures, to manage the fiscal deficit, mainly seeking the blessing of the International Monetary Fund (IMF) to advance a new loan. The government pledged to maintain the Convertibility Law, which ordered that a weight had the value of a dollar.
Beginning in February 2001 large flows of funds began to leave the country. The following month took over as Minister of Economy Lopez Murphy, but was repudiated by the opposition, and even by the radicals, in announcing the tariff university. Following the resignation of Lopez Murphy, in a surprising decision, the government appointed as Minister of Economy Domingo Cavallo, previously identified by the public as a symbol of the Menem government.
On December 1, 2001, Cavallo decided to impose the pen, a package of economic measures imposed by a bank of the economy by removing the prohibition of cash deposited in public and private banks. This measure, which significantly affects the middle classes, most support in the international financial institutions and markets, but people began to express considerable dissatisfaction.
By mid-December there were some outbreaks among the lower classes in some cities of the provinces, carried forward by the so-called piqueteros. Specifically, several shops in impoverished areas of the country were looted by sectors of the population unemployed and destitute.
Some political analysts attribute the riots to a destabilization plan orchestrated by some leaders of the Partido Justicialista.
A day after December 19, 2001 there were popular demonstrations known as the cacerolazos, where people gathered noisily banging pans. During the day there were serious riots and social unrest in various parts of country, with its epicenter in the city of Buenos Aires. During the severe clashes between demonstrators and police, ofwhich the most violent were those that occurred in the vicinity of Government House, killed at least 5 people.
Against this backdrop, the president decided to announce on national chain that had decreed the state of emergency, suspending constitutional guarantees of citizens. Spontaneously, thousands of people took to the streets, upset with the recent civil and economic. Pacific, the population expressed dissatisfaction throughout the night while the police trying to move away from Government House, using tear gas, resigned this evening the Minister of Economy Domingo Cavallo.
The day was December 20, new clashes between police and protesters gathered at the Plaza de Mayo, in front of Government House and elsewhere in the country.
Sustaining Domestic Budget Deficits in Open Economies by Farrok Langdana (Library Binding – Jan 12, 1990)