Inheriting a difficult legacy from his
military predecessors, President
Raúl Alfonsín's tenure had been practically defined by the foreign debt Argentina's last dictatorship left behind. Signs of unraveling in Alfonsín's 1985
Austral Plan for economic stabilization cost his centrist
Radical Civic Union (UCR) its majorities in the
Chamber of Deputies (lower house of Congress) and among the nation's 22 governorships in the September 1987 mid-term elections. Facing a restive armed forces opposed to trials against past
human rights abuses and mounting inflation, the president brought elections forward five months, now scheduled for May 14, 1989. Both major parties held national conventions in May 1988. The UCR nominated
Córdoba Governor
Eduardo Angeloz, a safe, centrist choice and the most prominent UCR figure not closely tied to the unpopular President Alfonsín. In an upset, however,
Carlos Menem, governor of the remote and thinly populated
La Rioja Province, wrested the
Justicialist Party nomination from the odds-on candidate,
Buenos Aires Province Governor
Antonio Cafiero, a policy maker close to the Justicialists' founder, the late
Juan Perón. Cafiero's defeat resulted largely from
CGT trade union opposition to his Peronist Renewal faction; Alfonsín's top political adviser, Interior Minister Enrique Nosiglia, in turn saw Menem's flamboyance as an opportunity for the struggling UCR. The Justicialists (Peronists) took a sizable lead in polling early on, however, even as nearly half the voters remained undecided. Hoping to translate this into a UCR victory over the outspoken and eccentric Menem, President Alfonsín enacted an August 1988 "Springtime Plan" in a bid for lower inflation (then running at 27% monthly). The plan, criticized as a rehashed "Austral Plan" by the CGT, called for budget cuts and renewed wage freezes - policies they blamed for sliding living standards. Initially successful, a record drought late in the year buffeted critical export earnings and led to
rolling blackouts, dissipating any gains Angeloz might have made from the "relief" of 6% monthly inflation. A perennial third-party candidate, conservative economist
Álvaro Alsogaray, made gains following the
January 1989 assault by Trotskyist militants on the La Tablada Barracks, west of Buenos Aires. Twice minister of the economy and remembered for his belief that the economy must go through "winter," the unpopular Alsogaray ran on a free market platform, calling for mass privatizations and deep cuts in social spending (amid 30% poverty). Angeloz took the controversial decision of including social spending cuts in the UCR platform, as well, earning the right-wing
Federal Party's endorsement; but alienating many others (particularly pensioners, among whom Alfonsín had won decisively in 1983). The largely civil campaign became increasingly a debate between the Justicialist nominee and the president, himself; Angeloz, the UCR nominee, remained "presidential" during the frequent exchanges of innuendo between Alfonsín and Menem. Following a sharp drop in
Central Bank reserves, the austral fell around 29% to the
U.S. dollar in heavy trading on "black Tuesday," February 7. The sudden drop in the austral's value threatened the nation's tenuous financial stability and, later that month, the
World Bank recalled a large
tranche of a loan package agreed on in 1988, sending the austral into a tailspin: trading at 17 to the dollar in January, the dollar quoted at over 100 australes by election day, May 14. Inflation, which had been held to the 5-10% monthly range as late as February, rose to 78.5% in May, shattering records and leading to a landslide victory for the Peronists. Polling revealed that economic anxieties were paramount among two-thirds of voters and Menem won in 19 of 22 provinces, while losing in the traditionally anti-Peronist Federal District (
Buenos Aires). The nation's finances did not stabilize after the election, as hoped. The austral halved to the dollar next week, alone, and on May 29,
riots broke out in the poorer outskirts of a number of cities. Having declared his intention to stay on until inaugural day, December 10, these events and spiraling financial chaos led Alfonsín to transfer power to President-elect Menem five months early, on July 8. When Menem accepted the presidential sash from Alfonsín, it marked the first time since 1916 that an incumbent government
peacefully transferred power to the opposition. == Candidates for presidency ==