Argentina's De la Rua looks to combat confidence crisis

BUENOS AIRES, Argentina (Reuters) -- President Fernando de la Rua raised the possibility of changes in the Argentine cabinet, in an interview published Sunday in which he vowed to go for growth and "moral change" after two bribery scandals.

The country of 36 million people has been in economic stagnation for two years and confidence in its politicians is at a low after two cash-for-votes scandals that have rocked the Senate since August.

De la Rua, whose center-left Alliance coalition was elected late last year after promising to clean up the sleaze that plagued the 10-year administration of Peronist leader Carlos Menem, told the top-selling Argentine newspaper Clarin:

"I want to put the emphasis on growth and tell people that the Alliance is united, the government is firm and we are going for growth. The markets should be confident. And that is what we are working for, with possible changes in the cabinet.

"I am going to lead ethical and moral change in the republic, which is why I was elected."

His cabinet had its first casualty Friday when Education Minister Juan Llach, a respected economist who also served in the Menem administration as a senior economic aide, resigned. But his departure was unrelated to the Senate scandal.

De la Rua gave no indication of which minister could be next. Economy Minister Jose Luis Machinea, who has been widely criticized for failing to talk up the economy, now expected to grow under 2 percent this year in contrast to his initial 4 percent forecasts, has been confirmed in his post countless times by De la Rua.

Others in the firing line have been Labor Minister Alberto Flamarique and secret service chief Fernando de Santibanes, both named by the news media as the main suspects of bribing senators to get a key labor market law passed in April. Both have denied any involvement.

Federal courts are now investigating 11 senators, eight from the Peronist bloc and three from the Alliance, over the labor bill and more recent allegations that bribes were offered for a hydrocarbons law that would favor oil firms.

Asked about Flamarique and Santibanes - the latter is his closest adviser - De la Rua said nobody should be "condemned while an investigation is going on." But he added: "This is not an issue of personal relationships."

But the 63-year-old president, a strait-laced lawyer who was previously mayor of Buenos Aires, said he did not agree with some calls for the whole Senate to resign. Some senators have already quit their seats to defend their good name, or been obliged by their parties to resign their leadership of the opposing benches.

"It is the Senate itself which must take measures to purge itself, to investigate and remove parliamentary immunity from those who may be the culprits," said De la Rua.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Argentine leader meets predecessor amid scandal
September 22, 2000
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