Well, they knew that no one is going to nuke a city over an island with a population of merely three thousand. Even threatening to use the bomb would've created a most dangerous precedent detrimental to Britain's security.
I’m not stating this as a matter of fact, but I have a feeling the actual deal with USA and France was that we would not conventionally bomb Argentinian mainland. In return we got some help from our NATO allies. I can see how this became not nuking people.....
A nuclear-armed submarine had indeed been in the vicinity, but essentially only since the British had needed underwater assets immediately and couldn't afford to waste any time. This rather innocent tidbit was heartily welcomed by Argentine nationalists who created the narrative: It took them the power of the atom bomb to stop us. Or: Lo! how those colonialist imperials terrorised us with the threat of nuclear armageddon whilst we were pressing our righteous cause.
I wonder if Argentina's obssession with the Falklands marks a repressed inferiority complex of sorts, the like of which may be observed in many a neophyte (or quasi-neophyte). I mean, how can they style themselves champions against colonialism? Half the country's population comprises third or fourth generation immigrants from Europe and Russia. Only a handful of indigenous peoples are left. Judging by their own untenable morality, the Argentines have barely ceased being colonialists themselves.
(trivia: had a plastic figure of him on a white horse as a kid)
And much stems from hardcore nationalists which at the time had interior problems due to weak economy (my father bought an Renault R4 with two suitcases full money) and them killing thousands of Argentinians in a try to repress any opposition)
Galtieri was under internal pressure and used the hundreds of years old dispute as a diversionary tactic. It stems from the time of Latin America becoming independent from the colonial power Spain. They claimed all former Spanish possessions as theirs.
Falklands War. 25 May 1982. A pair of Argentine Air Force A-4 Skyhawk's make their attack run on HMS Coventry (D118). She was sunk, killing nineteen of her crew and injuring another thirty. Photo by Lieutenant Bell-Davis RN.
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