Familiar Tune

President Raul Alfonsin was determined to be convincing. "A time bomb," he declared, "is planted in the middle of Argentine society." In a 30-minute television address last week, Alfonsin resorted to such dire imagery to convey a sense of emergency and justify a drastic new austerity program. To cure the country's economic ills -- runaway inflation of more than 100% so far this year, a foreign-debt burden of $55 billion and a current budget deficit of $5.6 billion -- the President offered a radical prescription: wage-price freezes, tax increases for middle- and upper-income earners and a currency devaluation of 11.8% to boost export sales. While foreign creditors generally welcomed the plan, the applause was perfunctory, since so many Argentine austerity campaigns have come and gone with few lasting results.

Alfonsin's intentions were as much political as economic. His government was shaken last month by the resounding defeat of his Radical Civic Union Party in midterm elections. The vote, which was viewed as a referendum on the administration's handling of the economy, left Alfonsin without a majority in Congress. After consultations with the opposition Peronist party, Alfonsin promised a 75% increase in the minimum wage, to $87 a month, even as he froze all other wages.

In his speech, Alfonsin skirted many problems. He outlined no fresh measures to reduce government expenditures or privatize any of the state's 520 deficit- ridden companies. Although Argentina has been conciliatory to creditors, foreign bankers have been especially leery of debtor nations ever since February, when Brazil stopped paying interest on a large part of its $110 billion debt. That helped lead several U.S. banks to declare record losses. Since a similar default by Argentina would add to the bankers' mounting woes, they are as eager for Alfonsin's new program to work as the President is.