The gray language of the bankers can no longer hide the major political challenge to the United States that was at the core of the recent Argentine debt crisis. That battle is not over. It is just beginning. President Raul Alfonsin's defiant stand wasn't just about payments. It was about survival, sovereignty, and, above all, power.
It was the start of a long-term contest for control in which the real issues are who decides and who benefits. To make sure it will be Argentina that wins and not the US acting through the International Monetary Fund (IMF), aides say, Mr. Alfonsin is prepared to wage international financial war.
It is part nationalism. It is part temperament and the habits of a lifetime spent taking on the old guard in his own political party, the military junta, and, now, the Peronist unions.
It is more than that. By accident or calculation, he discovered a key to reshaping the one-sided power relationship. He recognized his ability to hurt the US as much by withholding money as it could hurt Argentina. It was the beginning of a new kind of politics by nonpayment.
He learned it works in the earliest days of his administration and showed he had the nerve to play the game. During the March debt crisis, President Alfonsin was called away from dinner and told he had to give up his plan for wage increases in order to get IMF approval on new loans to pay the old loans due in a couple of hours. ''No,'' he said, and went back to his meal. It was the US and the IMF that backed down. The fund rushed to approve the loans rather than damage US banks with a loss of profits. If ever the banks went, the country might. It was a matter of survival for the US, too.
In the June crisis it was again the US with its decisive vote and financial weight in the IMF that caved in. Argentina, Mr. Alfonsin said, is prepared to make sacrifices to pay its debt, ''but not at the cost of going hungry.''
In a fundamental reversal of power, he continues to attempt to dictate his own very different economic plan to the IMF. When the current negotiation finally concludes, he may not have a clear victory on the policies for economic growth he believes will benefit Argentina and its people rather than just the US and its banks. He may not have a victory on the more basic question of who decides how to run his country. But it is an early skirmish, and the issues will come up every time a debt payment is due.
What is more significant is that the US and its banks won't have a clear win, either. Manufacturers Hanover alone had to take a $25 million loss when Alfonsin let the first payment deadline go by. The contest also revealed that the United States wasn't willing to risk debt default, and its troubled banking system was in no shape to face down a country fighting for its sovereignty and survival.
That is particularly true in the case of Argentina, because the US could lose the long-term-damage contest. Argentina, more than any other country, could repudiate its $45 billion total debt and survive the worst that could be done to it in terms of seizing its foreign assets and cutting off trade, credits, and money. Unlike Brazil, it is self-sufficient in energy. Unlike Mexico, it is self-sufficient in food. A Brookings Institution study suggests it would both survive and be better off financially by repudiating its debt.
As a man who understands the long-term nature of the battle and the need for allies, Mr. Alfonsin began building for the future even while in the middle of his present fight for small victories. It was at his instigation that 11 debtor nations met. Such unified action was unthinkable a year ago. The mere existence of the meeting was seen as a threat to the established order. In the US and Europe, worries started about a debtor cartel.
The politics of nonpayment is not yet at that point. Nevertheless, the debtor nations have set up a permanent consulting commission, with the next meeting scheduled for September in Buenos Aires. As one banker said, ''It can go anywhere from here.''
The politicizing of the debt issue directly challenges the US government on accountability as well as power. President Alfonsin and his allies believe it isn't just the banks and IMF, but the US government, that must be held responsible for helping to create and solve the debt crisis. US policies leading to recession, high interest rates, and unchecked banking practices contributed to the crisis, he argues, and now the US has to share the consequences. He wants governmental action that would split the financial burden with American banks and taxpayers.
In proposing this and other new solutions he continues to send the US the message echoed in the protests and riots in the streets of Argentina, Brazil, Ecuador, and the Dominican Republic. It is that the recessionary-squeeze and IMF approach aren't working. It's pushing countries deeper down the debt hole. It has to change.
For now, Reagan and his European allies have reacted to this challenge by holding tighter to the current arrangement. Reagan doesn't want government intervention; he wants the problem to be worked out by banks, the IMF, and debtor countries. In his specific views, Reagan is the opposite of Alfonsin. He says the financial austerity and IMF approach is working fine.
Alfonsin's answer is that it's no longer just Reagan's decision. The politics of nonpayment and Argentina's challenge will continue. The US can meet it in two ways. It can move in new and fairer directions. Or it and Argentina can ruin each other in tests of power. It would be a mistake to discount the second possibility, or Alfonsin's determination. He comes from a political party whose motto is ''Break, but do not bend.''
Marlene Nadle is a free-lance political reporter who has recently been based in Latin American.