"God Will Provide"

"Mrs. Peron is in very good health, just like Argentina." That was the sanguine remark of Joso Lopez Rega, Argentina's star-gazing gray eminence, as he arrived last week in Madrid, supposedly to become a special ambassador from Buenos Aires in Europe. In fact, his comment was inaccurate in almost every respect.

Lopez Rega had just been forced to resign as Minister of Social Welfare and personal secretary to President Isabel Peron--the positions that had made him the most powerful man in Argentina. Mrs. Peron, who has erratically governed the country since the death of her husband a year ago, was clearly in poor physical and emotional health. Argentina seemed to be teetering ever closer to economic collapse.

At week's end physicians recommended that Mrs. Peron limit her activities in order to speed up recovery from a bout of the flu. Some Argentines suspected, however, that the President's medical problems were more serious than her doctors would admit. Speaking to a crowd of 3,500 Peronist women on the day of Lopez Rega's departure, she gripped the microphones until her knuckles whitened and ominously declared: "Do not forget General Peron, who gave his life in pursuit of national unity even as I am doing at this very moment." Even to television viewers, the President looked overwrought and almost skeletal. Last week labor leaders had to stop reading a lengthy document outlining their economic proposals for ending the current fiscal crisis because Mrs. Peron was clearly not well enough for a long meeting.

There was speculation in Buenos Aires that she might ask Congress for a leave of absence for medical reasons. If granted, it would give her a graceful way to retire while her successor, newly elected Senate President Italo Luder, tried to put matters back in order. If the situation improves, Mrs. Peron could return to office and serve out the rest of her term as a figurehead President.

Economic Ruin. Whether or not Mrs. Peron requests a leave, it was apparent that she had already lost much of her power. She staked her prestige --and that of Lopez Rega--on a rollback of union wage claims, but was beaten last month when labor wrested UP, increases of up to 145% (TIME, June 23). That defeat spelled the end for the trusted coterie of advisers on whom she had relied since coming to power.

Following Lopez Rega into retirement last week were two other members of her Cabinet, Economy Minister Celestino Rodrigo and newly installed Social Welfare Minister Carlos Villone. In addition, Lopez Rega's son-in-law, Raul Lastiri, resigned as president of the Chamber of Deputies.

Mrs. Peron's government meanwhile has yet to deal with the country's main problems: the near prostration of the economy and continued demands by labor. The unions, having already won ruinously high wage increases, are pressing for a rollback in prices to the levels of May 31 and a price freeze. So far, the government has not gone along with the rollback, but it did announce that a freeze would be imposed. Equally disturbing, the country's foreign exchange reserves are down to an estimated $600 million from $735 million two weeks ago. "We have reserves for two weeks more," said Ricardo Zinn, second-ranking man in the Economics Ministry. "After that, God will provide."

If someone does not provide soon, Argentina's constitutional system will be in grave danger. Last week dozens of terrorist bombings shook Buenos Aires, leaving one dead and several wounded. Six police stations were also attacked. So far, the armed forces have obediently stayed in their barracks. Still, sources close to the military acknowledge that chaos in the streets, coupled with continued failure of the civilian government to head off economic ruin, could eventually provoke a coup.

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