Argentina president rejects Supreme Court ruling, sparking backlash

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BUENOS AIRES (Reuters) - Argentina's leftist President Alberto Fernandez has sparked a battle with the country's top court and something of a legal crisis after he said he would reject a ruling it made to give a larger proportion of state funds to the city of Buenos Aires.

The South American country has a system to regulate how state funds are distribute between the country's regions, including the capital city area, which is controlled by a conservative mayor and had been pushing for a larger slice.

In a ruling on Wednesday the Supreme Court said the level should be raised from 1.4% of the total pool of funds to 2.95% after it was cut by government decree during the COVID-19 pandemic in 2020. The city is the wealthiest and most populous area of the country.

Fernandez, in a statement late on Thursday, said the ruling was unjustified and pledged to ignore it.

"It is an unprecedented, incongruous, and impossible-to-enforce ruling," he said, calling the decision politically motivated ahead of general elections next year and adding that it would hurt the other provinces.

Fernandez, who has seen his popularity slide and whose ruling coalition was badly defeated in midterm congressional elections last year, said that the state would "challenge the members of the Supreme Court" and seek to have the ruling revoked.

His remarks sparked off a backlash on both sides, some agreeing with the president that the ruling was unjustified and others saying the rejection of a Supreme Court decision set a dangerous precedent and undermined the justice system.

"The president decided to break the constitutional order, completely violate the rule of law and attack democracy," said Buenos Aires city mayor Horacio Rodríguez Larreta, who is seen as a potential 2023 presidential candidate.

Various industry groups criticized the move as dangerous to the rule of law, while a number of regional governors sided with the president.

"This measure is, under current conditions, impossible to comply with," said Buenos Aires province Governor Axel Kicillof.

"There are already 18 governors who denounce the partisan decision of the Supreme Court to benefit the head of the city government against all the provinces."

(Reporting by Adam Jourdan and Marta Lopez; Editing by Frances Kerry)