BUENOS AIRES, Argentina – Argentine President Mauricio Macri painted a grim picture of the nation on Tuesday, telling Congress that the state is broke, drug traffickers are prospering and institutions including the armed forces are so weakened that the borders are barely protected and many military planes cannot fly.
Addressing Congress on the first day of the legislative session, Macri also blasted the previous administration, saying that political patronage had led to a major spike in the number of workers on government payrolls. Several thousand people have been fired since Macri assumed office in December.
"We are a great country with enormous potential," Macri said, sitting next to Vice President Gabriela Michetti as he addressed Congress. "But the first thing we must do is recognize that we are not in good shape."
Macri, a conservative and former mayor of Buenos Aires, campaigned on promises to modernize the economy by attracting foreign investment, root out corruption and solve a long-standing spat with creditors in the U.S.
Speaking in a somber tone during the hour-long speech, several times Macri returned to the issue of drugs. He said Argentina was a "prosperous country for drug traffickers," and added that the South American nation had become the world's third largest producer of cocaine.
The problem was exacerbated by "borders that are virtually defenseless" and a military so weakened that it possessed "planes that don't fly."
Macri addressed the long-standing fight with a group of creditors in the U.S., bluntly framing it as a problem now in the hands of Congress. On Monday, Argentina and the group of creditors led by billionaire investor Paul Singer announced a tentative deal, potentially putting an end to years of legal fights that have kept the South American nation from accessing international credit markets.
The deal, however, must be approved by Congress, where Macri doesn't have majorities in either chamber and will likely face stiff opposition from some sectors of the Peronist Party, which lost the presidency for the first time in 12 years in last year's election.
Macri said he trusted legislators would "be responsible" in their rhetoric and "we'll build the necessary consensus" to pass a deal.
Former President Cristina Fernandez refused to negotiate with the group of creditors she called "vultures," even after New York federal court Judge Thomas Griesa repeatedly ruled against Argentina.
Macri said the decision not to engage had cost Argentina dearly. He said the total hanging debt went from about $3 billion in the beginning to about $11 billion, and that the inability to access international credit markets had cost Argentina $100 billion and millions of jobs. He did not explain how he came to those numbers, but the implicit message to Congress was clear: don't mess this up.
Roberto Bacman, director of the Center for Public Opinion Studies, a South American research firm, said Macri will likely get the votes he needs to pass the deal with the holdouts, but that will mean negotiating on other things, like supreme court nominations.
"Votes are never free," said Bacman, adding that the biggest threat to Macri's ability to govern was the high inflation. Last year, it was estimated around 30 percent. After a sharp devaluation of the peso in December, prices have continued to soar.
Macri commented on the inflation, and said that the solution was to get the economy growing again after four years of virtual stagnation in its gross domestic product. He said the process would take time, and blamed the previous administration for "700 percent inflation in the last 10 years."
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