ARGENTINA held its breath this week as an embattled President Ra'ul Alfons'in maneuvered to hold the country's political and economic framework together. Offering one moment to step down before his term of office ended, and pledging the next to govern until Dec. 10 come what may, President Alfons'in has left the country hanging until Sunday, when he is to announce a new set of measures to stave off financial collapse.
``We will be imposing not only a war economy, there will be a crisis government'' to see Argentina through until Peronist President-Elect Carlos Menem takes office in six months time, Alfons'in said in a nationwide broadcast Tuesday night.
He is expected to unveil his new Cabinet - the former Cabinet also resigned Tuesday - at the same time as the packet of economic austerity steps on Sunday. Meanwhile the banks are to remain closed all next week to prevent a run on deposits.
Observers had expected the lengthy transition between the May 14th elections and Mr. Menem's accession to be complicated, but none had foreseen the speed with which the crisis developed.
Within days of the election, financial markets resumed the giddy downward spiral that had marked the weeks before the vote. The austral's value against the dollar was halved, bank interest rates topped 300 percent a month, and inflation raced to 60 percent a month.
Fearing that as a lame duck President he was powerless to calm the markets, Alfons'in spread it about quietly last weekend that he might be prepared to hand office over to Menem ahead of schedule.
Menem accepted the offer in principle, prompting hectic rounds of negotiations between Radical and Peronist officials on the political and economic details of such an accelerated transition.
Those talks collapsed after three days, however, with each side blaming the other for their failure. ``We could not accept the deadline that the government imposed'' on the talks, complained the head of the Peronist negotiating team, Eduardo Bauza, referring to Radical demands that agreement be reached by last Tuesday night.
On the political front, sources close to the negotiations say, the problem was how to shorten the transition without violating the Constitution - a condition on which both Alfons'in and Menem had insisted.
Although several ingenious ideas were advanced in order to shorten Alfons'in's Constitutional mandate, no one could find a way to cut short the terms of office of parliamentary deputies who had not won re-election on May 14th.
In the current chamber of deputies the Radicals and their allies enjoy a majority. ``Taking over early with the chamber against us'' would have been political suicide, one close Menem aide explained.
At the same time, Alfons'in said, if the handover were to be brought forward, he had insisted that, in the weeks remaining to him, the government should implement only economic policies agreed upon with the Peronists. The latter had rejected official proposals, he said.
Those proposals, it has emerged, included increases in public service tariffs, which were bound to be unpopular with lower-paid Argentines. Such steps, Menem argued, were ``wholly anti-popular, and we will have nothing to do with them.'' His stance betrayed the Peronists' dilemma, as Peronist parliamentary deputy Miguel Angel Toma explained it. ``We can make gestures, but we cannot get involved in government, or we will use up all our political capital before we take office.''
Both Alfons'in and Menem have said the door remains open for further dialogue, but the President made it clear Tuesday night in his pugnacious address that ``no one should come to me now and suggest that an early handover would be a good idea. I am ready to govern without flinching until Dec. 10.''