Reynaldo Benito Antonio Bignone Ramayón

For more than two months the propaganda machine in Argentina worked feverishly. On June 15, however, Galtieri acknowledged the military defeat. It was not only the war that had been lost, but the military's professional competence was also brought into question, as well as its capacity to provide political leadership for Argentina. The war dealt a fatal blow to Galtieri's political aspirations and prompted the president's resignation on June 17. The discussions between the military government and the political parties broke down as soon as news of the military defeat reached Buenos Aires. The frustration of an entire nation could be heard in the demands for the return of civilian rule that was embodied in the Multipartidaria's call for elections before the end of 1983.

Dissension within the military over the appointment of the new president was resolved the following day with the choice of retired general Reynaldo B. Bignone. Even before his inauguration, Bignone stated that Argentina had lived through abnormal days since the military takeover in 1976, and he established contacts with the Multipartidaria, which nonetheless announced the "National Emergency Program" condemning the regime and calling for structural changes in the country's political and economic system. The Multipartidaria program called for the reestablishment of constitutional rights, the end of the state of siege in effect since 1974, and the release of all political prisoners. In the socioeconomic sphere it sought increased consumption, exports, investments, and wages; lower interest rates; protection of industry and agriculture; the rescheduling of the international debt; and improvements in education, housing, and health services.

President Bignone announced the restoration of civilian political activity and stressed Argentina's commitment toward recovering the Falkland/Malvinas Islands in his July 1 inaugural address. Soon afterward he declared that his greatest ambition was to end the National Reorganization Process and hand the government over to an elected constitutional president. The new president had to deal with a series of pressing problems. The fate of the "disappeared" and the military involvement in the dirty war were being questioned, and the government prohibited media coverage of any demonstrations or the publication of any material dealing with subversion.

A series of austerity measures were implemented to ease the country's economic problems, but a rescheduling of the foreign debt was needed most. By 1983 the austerity measures imposed by the Bignone government had produced a favorable trade balance of US$3.7 billion. A steady decline in imports was largely the result of massive currency devaluations and import controls between 1982 and 1983. The peso fell during that period from 2,000 to 200,000 per United States dollar. However, in the early 1980s the major economic problems were the uncontrolled inflation, which rose from 131 percent in 1981 to 433 percent in 1983, and Argentina's ability to keep up with payments on its foreign debt, which reached US$45 billion in 1983.

Several demonstrations were organized by trade unions, church, and human rights groups in late 1982. In October a demonstration at the Plaza de Mayo brought together over 10,000 people, and another large Peronist meeting was held at a soccer stadium in Buenos Aires. In November 20,000 people protested against higher city taxes in Buenos Aires. In December there were two major demonstrations: a general strike supported by the Multipartidaria and observed by 90 percent of the work force, and a demonstration at the Plaza de Mayo, where about 300,000 people gathered to call for democracy.

Under increasing popular pressure, Bignone announced in February 1983 that elections for a civilian government would take place on October 30 and that the inauguration of the new president would be held in January 1984. In March the government experienced difficulty in meeting its international debt obligations. After a series of negotiations with the International Monetary Fund (IMF) that led to Argentina's agreement to take drastic measures to bring its inflation rate down to a 160-percent annual rate, a rescheduling of its short-term debt was achieved in August.