# Austral Plan (14 June 1985)

URL: https://allhistories.com/argentina/timeline/1985-austral-plan
Location: Buenos Aires
Themes: Human Rights

On 14 June 1985 President Alfonsín and economy minister Juan Vital Sourrouille announced the Austral Plan, a 'heterodox' stabilisation programme to halt inflation that had reached more than 1,000 percent a year. A new currency, the austral, replaced the peso argentino at 1,000 to one, and prices, wages, public tariffs and the exchange rate were frozen. The plan also included a scale for converting existing contracts to discount expected inflation, a commitment that the central bank would stop printing money to finance the Treasury, and increases in tax revenue. Monthly inflation dropped from around 30 percent to low single digits within months, and the plan was widely popular, helping the Radicals win the November 1985 midterm elections. The success proved temporary. Fiscal deficits persisted, the freeze was gradually relaxed, and a heavy foreign-debt burden, falling export prices and opposition from unions, which staged a series of general strikes led by Saúl Ubaldini, weakened the programme. Inflation accelerated again from 1986, and later plans, including the 1988 Plan Primavera, failed. The austral circulated until 1991, by which time it had lost almost all its value in the hyperinflation of 1989–1990.

## Why it matters
The Austral Plan was a pioneering heterodox stabilisation whose collapse paved the way for hyperinflation and the radical reforms of the 1990s.

Ruler at the Time: [Raúl Alfonsín](https://allhistories.com/argentina/rulers/raul-alfonsin)

## Sources
- [Wikipedia — Austral plan](https://en.wikipedia.org/wiki/Austral_plan)
- [Wikipedia — Argentine austral](https://en.wikipedia.org/wiki/Argentine_austral)
- [Wikipedia — Juan Vital Sourrouille](https://en.wikipedia.org/wiki/Juan_Vital_Sourrouille)
- [Wikipedia (Spanish) — Plan Austral](https://es.wikipedia.org/wiki/Plan_Austral)
- [Encyclopaedia Britannica topic lookup — Austral Plan Argentina 1985](https://www.britannica.com/search?query=Austral+Plan+Argentina+1985)
- [Wikipedia — Return To Democracy (period overview)](https://en.wikipedia.org/wiki/History_of_Argentina)