Argentina, stricken by economic crisis and widespread postwar disillusionment, remains in a volatile state of political and social disarray seven weeks after losing the Falkland Islands conflict with Britain.
The military leadership, particularly in the Army, is in serious danger of collapsing into new and even violent internal power struggles, according to well-informed sources here. Simultaneously, the weak Army government, increasingly controlled by the Army commander in chief, Gen. Cristino Nicolaides, is on the verge of open confrontation with militant political factions and the labor movement.
Among moderate politicians, including those who hope the present Army administration will last, fear is growing that the government's promise of a return to democracy by 1984 may be nullified by economic disaster or a new, violent coup.
For much of the public, meanwhile, the hope of peaceful reconstruction that followed the appointment of retired general Reynaldo Bignone as president last month has all but died out. "Argentina is living the saddest hour of its modern history," one newspaper columnist wrote recently. "Without captains, without rudder, without course and practically without ship, this country has turned into one of the great refugees of the modern world."
The Bignone government moved to reduce political discontent this week by releasing for final approval a long-awaited new law governing political parties. Political sources also say the Army is believed to be making a new effort to persuade the Navy and Air Force to rejoin the ruling junta they abandoned in June.
But political leaders privately describe even the new political law, which will allow Argentines to join parties and new parties to form for the first time in 6 1/2 years, as essentially cosmetic. "It is a gift," said one politician, noting the abandonment of longtime military intentions to limit the number of parties and force out the present political leadership. "But it is a minor element compared to the underlying crisis."
The threat of military chaos or a breakdown of the promised 18-month transition to democratic government, Argentines here say, arises from a host of problems interlinked with the repercussions of failure in the Falklands. Some began to develop in the year before ousted president Leopoldo Galtieri and his partners in the junta launched the Falklands invasion April 2, while others are familiar from decades of Argentine political and economic turmoil.
Perhaps the most glaring ills are those of the economy, which with its three-digit inflation and rapidly dropping production was declared "a national emergency" by new Economy Minister Jose Dagnino Pastore early last month. Since then, conditions have only grown rapidly worse.
An elaborate government program to shock Argentina out of its recession with subsidies, lowered interest rates and wage increases set off a wave of hyper-inflation that was unofficially calculated at 25 percent during two weeks last month--or more than 500 percent annually. Meanwhile, the Argentine peso, split into a bewildering 17 rates of exchange by the new program, has risen as high as 60,000 to the dollar on the black market--a 300 percent devaluation since May.
Once affluent Argentines have been reduced to sad jokes about the crowds of tourists from Uruguay and Brazil who now seem to be the only customers on the proud downtown shopping streets. And in the suburbs north of here, a movement of housewives has formed to picket shops with empty pots every Thursday to protest the prices of food they say they can no longer afford.
More militant action by union leaders is expected soon. Already, 6,000 maritime workers have staged an 18-hour protest strike shutting down most of Buenos Aires port, and a nationwide transport strike was narrowly averted last week.
The bitter popular reaction to economic conditions has been matched by continued recriminations over the Falklands conflict.
In the Army, Nicolaides has relieved every officer who served on the Falklands from the rank of general through major, while so far sparing the top generals who set policy. But the lower officers, including Falklands commander Mario Benjamin Menendez, have counterattacked in press interviews and internal reports blaming the defeat on the officers around Nicolaides.
"A face-off is now inevitable," said one source close to Army officers. "There will be a crisis that will challenge the foundations of the armed forces before it is through."
The most intractable problem inhibiting a military withdrawal from power, though, is the issue of Argentina's "disappeared," the estimated 6,000 to 20,000 persons who vanished and were presumably killed during the military's "dirty war" against internal opponents during the late 1970s.
In the last two weeks, several politicians--in one case representing the leading Peronist party--have for the first time openly called for investigations and trials of officers involved in both the Falklands defeat and the earlier internal violence.
Although these statements have so far not been backed by a majority of political leaders, they have provoked fearful and angry reactions in the armed forces.
President Bignone, who talked openly of the government's failings and the country's problems after taking office, has slowly receded from public view.
In his place, the real power in the government, Army commander Nicolaides, has quickly lived up to his reputation for toughness and extreme conservatism.
In recent weeks, Nicolaides has issued stronger and stronger statements denying the existence of the problems that preoccupy much of the country.
In a speech 10 days ago, for example, Nicolaides announced that Argentina's economic situation was "good," and that the Falklands conflict had been "a little setback" that "didn't mean anything".
Military officials and many political leaders maintain that the nationalistic, antidemocratic coup predicted in many quarters here would not hold up.
"A nationalistic dictatorship would last 15 days here," said one political activist, "because the armed forces are just too weak to maintain a government like that. But the problem is what would happen in those 15 days could pull the whole political process apart."
"The Disoriented Postwar" was the way the headline in the Sunday edition of the newspaper Clarin described it. "Argentina," it said, "having abandoned the happy unreality of before, seems to be slipping with brief and insecure moves down a rope suspended from the rocking seesaw of rumors and forebodings."