PAGE 01 BUENOS 01790 1813462 11 ACTIOlf ARA-10 AN 0760104-0479 INFO OCT-01 IS0-00' PH-04 NSC-05 SP 02 SS-15 IAE-00 INR-07 NSAE-00 DODE-00 0 W 06721 ft R l81250Z MAR 76 FH AHEHBASSY BUENOS- AIRES TO SECSTATE WASHOC 489 BUENOS AIRES 1790 E O 11652 GOS · TAGS PINT PFOR AR US SUBJECT ANAt Y SIS OF ARGENTINE POi ITICAI SITUATION 1 EMBASSY WISHES TO COMPLIMENT HIGHLY ANO EXPRESS ITS GENERAL AGREEMENT WITH THE ANALYSIS OF THE ARGENTINE SITUAT fON OUTLINED IN INR'S R£PORT NUNBE 328 OF FEB 20 1976 IT is AN EXCELLENT REPORT WE HAVE TWO OBSERVATIONS TO MAKE RE ITS CONCLUSIONS 2 THE FIRST HAS TO DO WITH THE PAPER'S CONCLUSION ON PAGE 5 THAT THE EKE RGENCE OF A CARETAKER MILITARY REGIME IS THE LEAST LIKELY ALTERNATIVE • IN THE LONGRUN THIS MAY BE CORRECT THOUGH THE SE IOR MILITARY COMHANOERS AT THIS POINT APPEAR TO SE-PLANNING A MODERATE COUP AND A CARETAKER GOVT WHICH WILL CA L FOR ELECTIONS WITHIN TWO OR THREE YEARS OR POSSIBLY LESS • ' THE CHANC S THAT· THEY WILL BE ABLE TO HOLD Hl THIS PLAN ARE NOT GOOD THE NATION'S ECONOMIC ANO POLITICAL PROBLEMS ARE AC UTE AND AS tNOlCAT£0 IN THE INR REPORT IT WILL TAKE FIRM ANO UNPOPULAR MEASURES TO SOuVE THEM FURTHER THERE ARE DIVISIONS WITHIH THE MILITARY EVEN THE MODERATE OFFICERS NOW IN CHM ANO ADMIT THAT THEY ARE HAVING TROUBLE RESTRAINING THE HOTHEADS WHO HAVE WANTED TO MOVE TOO SOON -WHO WANT TO TAKE HASS REPRISALS AND FUT·PERONISTS AS WELL AS TERRORISTS AGAINST THE WALL WITHOUT A TRIAL AS -OPPOSITION ·DEVELOPS TO THE AUSTERE ECONOMIC RO RANS WHICH THE MltlfARY WILL PROBABLY IMPLEMENT IT WILL BECOME EVEN HORE OirFICULT TO KEEP THESE HARDLINERS IN CHECK IN SJJM WHILE THE CARETAKER GOVT SEENS THE MOST PAGE 02 BUENOS 01790 181346 UMClASS f ED i · 1 - U ' r ·1 - l fG - li DUPE ui t H1Ju 1 L'J LIKELY TO EMERGE INITIALLY THE DYNAMICS OF °THE' SITUATION ARE 'SUCH THAT IT HAY VERY WE LL GIVE WAY TO THE SECOND OPTIOI INDICATED IN THE PAPE R--THAT OF MILITARY RULE FOR AN EXTENDED DURATION ANO OF UNPRECEDENTED SEVERITY 3 SECOND WHILE THE E118AS iY DOES NOT DISAGREE IJITH THE CONCLUSION ON PAGE 7 THAT NONE OF THE SHO _-r TERH ALTER NATIVES ARE LIKELY TO SHARPl Y AFFECT OUR INTEffEST S IN- A NEGATIVE WAY ARGENTINA'S HIILAISE HAS REACHED SUCH A POINT THAr THE MILITARY HAY ALSO f'AIL IN THEIR ATTEMPTS TO TREAT IT THE COUNTRY IS FACED Wl TH RAMPANT TERRORISM AN ECONOMY· ON THE VERGE OF COLLAPSE BllDL Y FRAGMENTED SOOY POL 'IT IC AND WOijST OF· ALL GROWING CYNICl' S1'l AND FRUSTRATION WI·TH RESPECT TO ANY POSSIBLE SOLUTION SHOlJLO THE MILITARY GOVT BE UNABLE TO FINO AT LEAST PARl'IAL REHEOIES POPULAR SENTIMENT WILL TURN AGAINST IT QUICKLY THE LEFTIST EXTREMISTS HAY THEN FIND THE CONOITIO S UNDER WHICH THEY COULD BUILD A POPULAR BASE WHILE NONE ARE IHMEOIATE Y APPARENT AT THIS POINT SOLUTios· NAY EMERGE FACED WITH -·THE GREATEST 'CRISIS IN M llj ARGENTINE HISTORY THE _NATION 'S POLITICAL AND MILITARY LEADERS HAY RISE TO THE CHALLENGE IF NOT HOWEVER ARGENTINA HAY BE HEADED TOWROS A DISASTROUS SITUATION OF SUCH HAGNITUOE THAT US INTERESTS ACROSS THE BOARD OULD BE SERIOUSLY THREATENED BEAL '