Argentine president defends economic policies in speech, takes aim at unelected judges

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Argentina's President Cristina Fernandez and Vice President Amado Boudou, right, clap as supporters sing, not pictured, after Fernandez entered the chamber of the Argentine National Congress in Buenos Aires, Argentina, Friday, March 1, 2013. Fernandez was on hand to inaugurate the 2013 legislative year. (AP Photo/Victor R. Caivano)

BUENOS AIRES, Argentina - President Cristina Fernandez opened congress Friday with a marathon, 3 1/2-hour speech describing her government's "victorious decade" in power and defending her management at a time of falling confidence in Argentina's economy.

She also announced a major effort to reform Argentina's sclerotic judiciary — a plan that deeply worries her opponents. With congress firmly controlled by her party and allies, and many executive branch initiatives simply announced through presidential decree, her opponents have long used court injunctions as a brake on her power.

On other topics, Fernandez defended the joint Argentine-Iranian "truth commission" that she hopes will solve Argentina's worst terrorist attack, the bombing of a Jewish centre in Buenos Aires that killed 85 people. The diplomatic effort deeply concerns Jewish leaders.

"This has been a decade won by the Argentines," she declared, providing rosy numbers on many aspects of Argentine society. "This is a decade won, not in terms of elections or party politics, but in the social recuperation, economic development and equality of the 40 million Argentines."

Some recent economic indicators suggest those gains are increasingly fragile. Argentine stocks fell sharply and the risk of investing in Argentina jumped nearly 13 per cent on J.P. Morgan's index after the country's lawyers told a New York appellate court Wednesday that the government will refuse to pay, even at the risk of triggering a debt default, if it loses a closely watched case over unpaid bonds.

Capital flight is increasing, with more than $1 billion in foreign currency flowing out of Argentina in the last month. The government is aiming to devalue the currency by 20 per cent this year, but Argentines are increasingly taking a 55 per cent loss to trade their inflationary pesos for safer dollars on the black market. Many Argentines have received double-digit pay raises only to see their gains wiped out by ever-higher inflation.

While Argentina's economy grew at an average of 7.2 per cent a year from 2003 to 2011, private analysts say it slowed to 1.4 per cent last year, according to a bleak summary of the country's investment climate published this week by the U.S. State Department.

Fernandez called on lawmakers to put forth an "enormous effort to avoid falling back into the hell" that Argentina climbed out of after its 2002 economic collapse.

"I am not going to climb down that ladder to hell again. We deserve to live in a better fatherland, a better country," she said.

Argentina's judiciary is notoriously overburdened by cases, slow to act and vulnerable to political manipulation. Many judges serving lifetime appointments were installed decades ago, and nepotism is rife within their offices. For better or worse, both sides of Argentina's political divide have judges who protect their interests, by issuing injunctions to block government initiatives or shelving corruption investigations.

"The injunction has been transformed into a true distortion of the law and a source of injustice, inequality and the negation of the administration of justice," Fernandez said.

While wide-ranging proposals are being prepared for congressional votes, Fernandez announced one key to the puzzle Friday, saying she would push for direct election of the Magistrate's Council, which has the power to discipline and remove judges who otherwise have lifetime appointments. The presidency currently has only five dependable votes on the 13-member council. Fernandez would have all the members directly elected.

The president also defended the treaty that congress approved this week to establish a joint commission with Iran to examine the evidence in the 1994 Jewish centre bombing. Argentine prosecutors believe Iran ordered the attack, something the Islamic republic denies. The accord now awaiting approval by Iran's parliament would enable the Argentines to question top-level Iranian suspects in Tehran.

Fernandez's opponents and Jewish leaders have suggested darker motives, saying the bombing case stands in the way of Argentina helping Iran get around U.N. sanctions for developing its nuclear capacity.

The president denied charges that the prospect of more trade with Iran was driving the effort, saying Argentina has strongly supported the U.N.-sponsored nuclear non-proliferation efforts. Getting at the truth of the bombing after years of wrong turns, cover ups and other investigative failures is her goal, she insisted.

"No one, even today, knows what happened," she said. "My commitment with this case is to know the truth, not only what happened abroad but what happened here, too. I want to know who were the ones to cover up, to hide evidence. I deserve to know it as an Argentine and the victims and their families deserve it, too."