.. J)IADIN 792-76 11 MARCH 1976

DECLASSIFIED IN FUll Authority: EO 13526

.. 88NFIBENTIAL

DEFENSE INTELLIGENCE

NOTICE Chief, Records & Dec lass Div, WHS Date: JAN 2 2 2018

Office of the SecretarY ol' Defense Chief, RDD, ESD, WI IS +S U~(. ~552.. Date: 22 Jtlr\ WS Authority: EO 13526 Declassify: X Deny in Full: __ Declassify in Pun: __ Reason: MDR: ~~1~~-M~-~k~IS~O~-------

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Page determined to be Unclassified Reviewed Chtef, RUD, WHS 11\W EO 13526, Section 3.5 Date: JAN 2 2 2018

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ARGENTINA

MRS. PERON TEMPORIZES WHILE MILITARY CONTINUES TO PLAN.

:{I@;'H8FOfllf) In a further effort to appease labor and attempt to rally support, the government has re­portedly awarded all workers a 20 percent wage boost.

~) h&PM~ The move follows several days of wildcat strikes by labor protesting the 12 percent increase announced earlier as part of the govern­ment's new economic austerity plan. Union workers in the capital and the nation's key industrial city of Cordoba had claimed the raise was insufficient in light of a cost of living increase of almost 30 percent in the first two mon t hs of 1976, deval­uation of the peso by over 40 percent, and govern­ment-authorized price increases in the cost of fuel and basic utilities.

(II) 246£ 01&4) Mrs. Peron also addressed the nation from the headquarters of the principal labor organ­ization, stressing that its leaders had approved the government's austerity program and calling for sacri­fice and unity in support of the government. Despite the headquarters' support, however, subordinate unions will almost certainly consider the 20 percent unaccept­able and further strikes are likely. The labor move­ment's chronic factionalism will further dilute the leadership's backing for Mrs. Peron.

(@9 idbl bl&J I Meanwhile, Mrs. Peron's political position does not appear to have improved as a result of her reelection as chief of the Peronist Party earlier this week. Her reelection is considered a pyrrhic victory at best since the opposition delegates either boycotted the proceedings or were not permitted to attend.

(Continued)

11 Mar 76 DIADIN 792-76

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~M!;'IiiF8iiU; 'IilfliM¥£1J) The military reaction to the government's latest move remains unclear . The armed forces leadership apparently remains firm in the resolve to act against the President, but Army Commander Videla and other moderates wish to delay moving until Mrs. Peron's government is completely discredited. Her failure to . successfully implement the economic austerity program, continuing terrorist violence, and further strikes by labor will , however, strengthen the position of hard- l ine military com­manders -who are pressing for a coup and threatening to depose Videla if he refuses to act . Gen Videla may thus be forced to move within t he next few days . Key army corps commanders apparentl y met wi t h Videla in the capital on the lOth .

~}9GfBkH) If Videla can hold off, the armed forces will stand to benefit. Those army and air force elements which reportedly are not ready to assume the responsiblity for the mi nistries they have been designated will be able to complete their preparations. The further deterioration of the political situation will also tend to discredit Mrs . Peron and Peronisrn and increase popular support for the armed forces . (1tJBS i il2Jf9@!&M§%i!fyAffP61P nWiti&-6 2 dO i2 E i d&j!lx&tatt!M..,.

PREPARED BY:

DECLASSIFIED IN FUlL Authority: EO 13526 . Chief, Records & Declass Div~ WHS Date~ JAN 2 2 2018

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DIADIN 792-76 AS OF: 1730 EST 11 March 1976 Distribution "B"