Argentine VP says president needs more time

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By MICHAEL WARREN, Associated Press

BUENOS AIRES, Argentina (AP) — President Cristina Fernandez would need a third term in office to complete her transformation of Argentina, her vice president said Thursday, feeding her opponents' fears that the newly re-elected leader will try to change the constitution and stay in power beyond 2015.

Asked repeatedly during a radio interview if reports that Fernandez's inner circle is floating the idea of eliminating term limits are true, Boudou declined to dismiss them. Instead, he said that "without a doubt, without a doubt" the country needs more than four more years with Fernandez as president.

"Argentina has found a leader who is much more than just someone who governs, and that doesn't happen very often," Boudou told Radio de la Red.

Fernandez's opponents have worried openly that she'll use her restored majority in Congress to eliminate the constitution's limit to two consecutive four-year terms for Argentine presidents. Dr. Hermes Binner, a distant second-place finisher in the October election Fernandez won with 54 percent of the vote, called it "ethically unhealthy." Ricardo Alfonsin, who finished third, said "Society doesn't look kindly on efforts to stay longer in power, trying to change the law. Later, the leader will be punished."

Fernandez was re-elected in October to a term that ends in 2015. Her popularity has only increased with the latest economic indicators, which she announced in detail in a national address Wednesday night.

Average salaries in Argentina rose 29.5 percent last year, while revenues kept pace at 30 percent, she announced.

"We've broken all the records, collecting a historic 52,844 million pesos ($12.2 billion)," President Cristina Fernandez said in a national address Wednesday night. "These kinds of numbers are proof of the drop in unemployment to 6.7 percent, breaking through for the first time in the last decade the floor of 7 percent."

Private sector salaries rose even more sharply, by 36 percent. That's more than triple the official annual inflation rate of 9.5 percent, but more closely matches what private analysts say is the true pace of price increases.

Meanwhile, Argentina's central bank predicted economic growth of 6 percent in 2012, citing efforts to reduce exposure to global financial contagion, increase jobs and keep the economy growing. Fernandez unveiled a new small-business loan program with this in mind, making the central bank the guarantor, "not of risks but of opportunities," she said.

She also announced an increase of nearly 18 percent in government pensions, putting about $58 more into the pockets of nearly 7 million retirees starting next month, at a cost of about $461 million.

Argentines are racing uphill all across the economy as inflation shows no signs of easing. The pensions announcement also sets a precedent for this year's wage hike talks, with business leaders seeking to hold raises to 18 percent and unions demanding 25 percent or more.

Fernandez warned that her government will intervene in the talks if necessary, and said a commission will study the profitability of each sector and company so that raises match revenues.

"We want this money to be invested, to sustain economic activity and have a fair distribution of income," she said, warning both union and business leaders not to overreach.

The commission also will study executive salaries and examine whether the gap between their income and their rank-and-file employees has become too wide, she said.

"Strange things are showing up in many large companies: executive salaries of 2 to 10 million pesos ($461,000 to $2.3 million). I don't know what these businesses are doing or what profits they're making. We're going to thoroughly study this issue."

Argentina is entering an economic cycle, she stressed, "that demands a great deal of responsibility on the part of businesses, which have made a lot of money, perhaps more than ever before."

Meanwhile, in Washington, the International Monetary Fund gave Argentina 180 days to restore international credibility to its inflation index, which has been widely discounted since the government intervened and changed its methods in 2007. On Wednesday, the IMF board ordered its general director to report on the country's progress by Sept. 6.

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