Argentine president asks for resignation


President Fernando De la Rua asked his entire Cabinet to submit their resignations Saturday, a day after his economy minister abruptly stepped down, sparking a political crisis.

According to a government statement, Chief of Staff Chrystian Colombo “asked all of the Cabinet level ministers and secretaries to step down to facilitate a reshuffling of the Cabinet.”

De la Rua’s spokesman confirmed that Economy Minister Jose Luis Machinea, the architect of Argentina’s austerity plan, had submitted his resignation late Friday amid rising dissatisfaction with a tepid turnaround from a two-year economic slump.

Spokesman Ricardo Ostuni said Machinea would stay on until a successor could be named Sunday.

The pending Cabinet shake-up was the biggest political crisis of De la Rua’s two-party ruling coalition since his vice president, Carlos Alvarez, resigned last October, and marked another blow to a country mired in a financial crisis.

The fresh political turmoil comes two months after Argentina secured a nearly US$40 billion bailout plan from international lenders. But austerity measures have yet to trigger economic revival.

The announcement came on the second day of late-night meetings between the president and his top aides at his residence in Olivos, a Buenos Aires suburb.

The president spent most of Saturday huddled in meetings with a steady stream of political leaders, including his brother, Justice Minister Jorge De la Rua, Interior Minister Federico Storani, and Colombo. Also attending the meetings were coalition leaders Raul Alfonsin and former vice president Carlos Alvarez.

Machinea had come under mounting criticism for not doing enough to revive the economy, now mired in a nearly three-year recession. News of his pending resignation surprised economists and analysts and came late Friday after financial markets closed.

In December, Machinea helped secure a US$39.7 billion emergency aid package from the International Monetary Fund to bolster the ailing economy and help Argentina avoid defaulting on its hefty foreign debt obligations.

But negative economic indicators last month signaled a recovery was still out of reach, making international investors jittery.

The upheaval raised new questions about the future of the badly tattered ruling alliance, made up De la Rua’s Radical Party and center-left members of his Frepaso coalition partners. That alliance was severely tested by the resignation of the vice president in October of last year.

Analysts said the shake up in the Cabinet was an attempt by De la Rua to reshape his government’s beleaguered image and to help give new impetus to getting the economy going again.

Meanwhile, presidential aides had no comments on possible successors to Machinea, saying meetings would continue Sunday.

“We should have some definition Sunday” said Ostuni, speaking with reporters in Olivos.

Current Defense Minister Ricardo Lopez Murphy, who cut short a trip out of the country, is among the possible choices, as is Colombo. A U.S.-educated economist, Lopez Murphy is widely viewed as a fiscal conservative and popular on Wall Street. Before joining De la Rua’s government, Colombo was a successful banker and economist in Argentina.

Also among the reported changes was the possible addition of Domingo Cavallo as the Central Bank president. A former economy minister in a previous administration, Cavallo crafted Argentina’s one-to-one currency peg which helped to stamp out hyperinflation in the late ‘80s. Cavallo is an internationally renowned economist who has helped advise Russia and Ecuador through financial crises.