Argentine President Mauricio Macri addressed the Congress on the first day of legislative session, on Tuesday, saying the state is broke, drug traffickers are prospering and institutions including the armed forces are so weakened that the borders are barely protected and many military planes cannot fly.
Macri criticised the previous administration, saying that political patronage had led to a major spike in the number of workers on government payrolls.
Macri who is conservative and former mayor of Buenos Aires, took office in December, since then thousands of people have been fired.
"We are a great country with enormous potential," Macri said and added "But the first thing we must do is recognise that we are not in good shape."
The president promised in his election campaign to modernise the economy by attracting foreign investment, root out corruption and solve the long standing dispute with creditors in the US.
Macri mentioned the issue of drugs several times in his speech. He said Argentina was a "prosperous country for drug traffickers," and the country had become the world's third largest producer of cocaine.
The problem was exacerbated by "borders that are virtually defenseless" and a military so weakened that it possessed "planes that don't fly."
Macri also commented on economic measures. He said the solution was to get the economy growing again after four years of virtual stagnation in GDP. He said the process would take time, and blamed the previous government for "700 percent inflation in the last 10 years."
Macri addressed the long-standing fight with a group of creditors in the US, implying that the problem is now in the hands of Congress.
On Monday, Argentina and the group of creditors led by billionaire investor Paul Singer announced a tentative deal, potentially putting an end to years of legal fights that have kept Argentina from accessing international credit markets.
The deal must be approved by Congress, where Macri doesn't have majorities in either chamber and will likely face stiff opposition from some sectors of the Peronist Party, which lost the presidency for the first time in 12 years in last year's election.
Former President Cristina Fernandez refused to negotiate with the group of creditors she called "vultures," even after New York federal court Judge Thomas Griesa repeatedly ruled against Argentina.
Macri said the decision not to engage had cost Argentina dearly. He said the total hanging debt went from about $3 billion to about $11 billion.
The inability to access international credit markets had cost Argentina $100 billion and millions of jobs he added.
Macri said he trusted legislators would "be responsible" in their rhetoric and "we'll build the necessary consensus" to pass a deal.