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(Jan 27, 2010) On December 14, 2009, Argentina's President Cristina Kirchner issued an emergency Decree (Decreto de Necesidad y Urgencia [Emergency Decree or DNU] 2010/2009, BOLETIN OFICIAL (B.O.), Dec. 15, 2009, available at http://www.infoleg.gov.ar/infolegInternet/anexos/160000-164999/161506/no
rma.htm
) creating the Fondo del Bicentenario para el Desendeudamiento y la Estabilidad (Bicentennial Fund for the Non-Indebtedness and Stability, FBDE). The action was taken after Congress had begun its annual summer recess. This decree ordered the transfer of US$6.5 billion of the Central Bank reserves to the FBDE to pay foreign debts due to mature in March and August of 2010. According to the National Constitution, the payment of internal and external debt is within the competence of the legislative branch and not the executive. (Constitucion Nacional, art. 75.7, http://infoleg.mecon.gov.ar/infolegInternet/anexos/0-4999/804/norma.htm (last visited Jan 19, 2010).)

The President of the Central Bank, Martin Redrado, refused to follow Kirchner's order to make the transfer, citing the constitutional requirement that such a movement of funds be approved by the legislature. (Gustavo Ahumada, Enredados en la Justicia, DIARIO JUDICIAL, Jan. 8, 2010, available at http://www.diariojudicial.com/nota.asp?IDNoticia=39345.) Even though the Central Bank, by law, is an independent and autonomous entity and is expressly forbidden from following orders, indications, or instructions from the Executive when formulating and executing the monetary and financial policy of the country (Carta Organica del Banco Central (COBC), Law 24144 of Oct. 13, 1992, art. 3, ¶4, B.O., Oct. 22, 1992, available at http://www.infoleg.gov.ar/infolegInternet/anexos/0-4999/542/texactley205
39.htm
), Kirchner signed another DNU (Decree 18/2010, http://www.infoleg.gov.ar/infolegInternet/anexos/160000-164999/162676/no
rma.htm
(last visited Jan. 19, 2010)) removing the President of the Central Bank from office because he refused to resign despite being asked for his resignation by Kirchner.

The decree justifies the dismissal, arguing that Redrado committed misconduct and was guilty of non-compliance with his duties as a public officer. These are the grounds for the dismissal of the Central Bank directors, according to the Central Bank bylaws (COBC, art. 9, supra). The law, however, also requires the prior advice of a special Congressional Commission (id., art. 9). Since Congress is in recess until March, Kirchner issued a DNU without the required congressional intervention.

The validity of these emergency decrees is being challenged by opposition leaders and Redrado, who state that the decrees were issued in violation of the legal requirements. A federal judge decided on January 8, 2010, to suspend both emergency decrees, thereby preventing the use of the reserves to pay off the national debt until Congress votes on the matter, according to the procedure established under law. (Perez Redrado, Hernan Martin c/ EN PEN DTO 18/10 s/ amparo 16986, Juzgado Contencioso Administrativo Federal número 11, of Jan. 8, 2010, available at http://www.clarin.com/diario/2010/01/08/um/sarmientoredrado.pdf; Law 26122, regulating the DNU, http://www.infoleg.gov.ar/infolegInternet/anexos/115000-119999/118261/no
rma.htm
(last visited Jan. 19, 2010).) According to the judge, Congress may vote on the validity of the DNU 2010/09 if called into extraordinary session during its summer recess by the President (Constitucion Nacional, art. 99.9, supra) or wait until the ordinary session resumes in March (id., art. 63). In addition to suspending the DNU that dismissed Redrado, the judge, on the same day, ordered his reinstatement as Central Bank president (Decree 18/2010, supra) until the congressional commission acts. This commission is provided for in article 9 of the COBC and may render an opinion on the removal of any of the members of the Central Bank board of directors, including the President.

According to constitutional law experts, emergency decrees are exceptional measures that allow the President to assume legislative power due to an emergency situation that prevents the ordinary legislative process from taking place. Professor Torres Molina states that the extraordinary circumstances that the Constitution refers to allow for emergency decrees are:

1) that Congress cannot hold a session. This requirement does not refer to a situation when Congress is in recess, since it may be called upon to extraordinary sessions, but to situations in which Congress is prevented from holding sessions, such as when there is a coup d'etat, for example; and

2) the adoption of a measure that, if it is made public through the regular legislative process before its entry into force, it would undermine its efficacy, such as a devaluation or other change of the currency. (Torres Molina, ABSOLUTISMO PRESIDENCIAL, DECRETOS DE NECESIDAD Y URGENCIA 73-74 (Buenos Aires, Ediar, 2001.)

Appeals by both the government and the opposition are pending. In the meantime, the institutional crisis resulting from the confrontation between the government, the Central Bank, the opposition, and the judiciary remains unsolved until the President decides to call an extraordinary session of Congress or the validity of the DNUs is finally decided by the courts. (La Justicia Freno El Uso de Reservas Para el Pago de la Deuda, DIARIO CLARIN, Jan. 8, 2010, available at http://www.clarin.com/diario/2010/01/08/um/m-02115938.htm; Crisis Institucional en Argentina, EL UNIVERSO, Jan. 11, 2010, available at http://www.eluniverso.com/2010/01/11/1/1361/crisis-institucional-argenti
na.html
; & Ahumada, supra.)

Author: Graciela Rodriguez-Ferrand More by this author
Topic: Constitution More on this topic
Jurisdiction: Argentina More about this jurisdiction

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Last updated: 01/27/2010