Reynaldo Bignone

Uncomfortable with the media, Bignone's press statements left doubts as to whether there would be an imminent call for elections.

His loosening of certain free speech restrictions also put his regime's unpopularity in evidence and the newsstands brimmed with satirical publications. Humor, had its January 1983 issue confiscated after Army Chief of Staff, General Cristino Nicolaides, objected to caricaturist Andrés Cascioli's portrayals of the junta.[3]

Bignone chose Domingo Cavallo to head the Argentine Central Bank. Cavallo inherited a foreign debt installment guarantee program that shielded billions of private debt from the collapse of the peso, costing the treasury billions. He instituted controls over the facility, such as the indexation of payments, but this move and the rescission of Circular 1050 threw the banking sector against him; Cavallo and Dagnino Pastore were replaced in August.

Bignone's new President of the Central Bank, Julio González del Solar, undid many of these controls, transferring billions more in private foreign debt to the Central Bank, though he stopped short of reinstating the hated "1050."[4][5]

Six years of intermittent wage freezes had left real wages close to 40% lower than during Perón's tenure, leading to growing labor unrest. Bignone's decision to restore limited rights of speech and assembly, including the right to strike, led to increased strike activity. Saúl Ubaldini, the new leader of the reinstated CGT, Argentina's largest labor union, was particularly active. Bignone's new Economy Minister, Jorge Wehbe, a banking executive with previous experience in the post, reluctantly granted two large, mandatory wage increases in late 1982. Calls for immediate elections led, likewise, to frequent demonstrations at the President's executive offices, the Casa Rosada. One such protest, on 16 December, led to the death of a demonstrator.[5]

Bignone, with the new president, Raúl Alfonsín.

Drawing a contrast between his position and the lukewarm reproach by others in his own party and in other parties, Raúl Alfonsín, the head of the centrist UCR's progressive wing who had also opposed the Falklands War when few others in Argentina did, earned his party's nomination in July. The convention was called only days after Bignone publicly announced the scheduling of elections (to be held on 30 October, three months after the announcement). The UCR's only important opposition, the Justicialist (Peronist) Party, was hamstrung by voters' memories of President Isabel Perón's two years in office and by internal friction that dragged their nominating process on by nearly two months.[3]

The Argentine economy, which had recovered modestly following the July 1982 cancellation of prevailing wage freezes and the rescission of Circular 1050, was saddled with foreign debt interest payments of over US$4 billion, capital flight, budget deficits around 10% of GDP and a resulting rise in inflation: rising to 200% in 1982, it approached 400% in 1983. Economy Minister Jorge Wehbe released a new currency in June, the peso argentino, to replace the worthless peso ley at 10,000 to one. This move secured him concessions from international creditors, but did not slow inflation, and the economy slipped back into recession during the second half of 1983.[6]

Careful to avoid the appearance of endorsement of any one candidate (a mistake made by a previous dictator, General Pedro Aramburu, in 1958), Bignone oversaw the shredding of documents and other face-saving measures, such as generous new wage guidelines. The economy, which had contracted by around 12% in the eighteen months before he took office, managed a recovery of around 4% during Bignone's eighteen-month term.[7] Following a brief, though intense campaign and tight polls, election night resulted in a 12-point margin for the UCR's Alfonsín over Justicialist nominee Ítalo Lúder. Tied to repressive measures he signed in 1975, he could not avoid suspicion of a gentleman's agreement with Bignone for the sake of preventing future investigations.[3]