Argentina and the Call to Default

Eduardo Duhalde (for it is he)

If you read El Porteño's excellent post yesterday that explains the key present role of Eduardo Duhalde in Argentine politics, you'll understand that what follows is a very significant move towards Argentina defaulting in 2009 or 2010. If you haven't read it yet, here's the link again. You'll see just how important Duhalde is right now.

Now here's the crunch: Duhalde gave an interview on Argentine radio this morning and basically said that if all the rest of the world were in financial trouble and were defaulting on loans, they'd be stupid to pay up. Remember this is the most powerful man in Argentine politics outside of the Kirchner block and many expect the Duhalde-led pact to make a very strong showing in the 2009 end of year elections. Do not take Duhalde or his words today lightly; this is a serious call for Argentine default.

Here are some direct quotes from this morning's interview put through the Ottotrans™:

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"It's not that simple, this bill is not ours to pay. Latin America has to rebel like Africa and Asia. We have nothing to do with this. There's no reason why we should be hurt by this."

"The government does what it can (but) there is no deep analysis about what is happening."

"If the world is bankrupt, let's put our debt in with the others and see what happens later. What we have to do is take care and look after what is left of our reserves."

"It's very difficult and I don't think that much more can be done. The government has to think seriously in what I've said; this bill isn't ours to pay. This crisis was born in the USA, it hurts all of us and they have the chance to print money and save their own people. We don't have that opportunity.

"(During the Kirchner government) unfortunately they paid the U$9Bn dollars in IMF debt. It was announced in such a triumphant way that it was like Fidel Castro descending from the Sierra Maestra, when in fact it was stupid."

"That they now want to pay the Paris Club debt of other unnecessary highlights the fact that in this government there is no deep analysis about what is happening and what must be done."

UPDATE: Dear Mr. Dowsett, learn Spanish.

From a Porteño viewpoint: Eduardo Duhalde

This week, El Porteño brings us an inside look at Eduardo Duhalde. Neither a hit-piece or a note from a Duhalde fan club, he brings us some excellent insight on this most important of Argentine political players. It's a pleasure to have such a great voice on Argentina as a regular guest blogger. All yours, Porteño:

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I still recall the year 2002 when Eduardo "The Godfather" Duhalde took over the presidency (after the infamous period of five Presidents in one week). They were Kafkaesque times and it was the worst crisis in our modern history. Somebody was needed to do the dirty work and Duhalde it was who was chosen to "pesificate" debt (ottonote, turn debt held in dollars into Argentine Pesos), especially of the large companies. I myself went out into the streets, banging my casserole and demanding that a delinquent such as he should resign. Later, Duhalde had to call snap elections after the police killed two young protestors in a demonstration and thus Nestor Kirchner arrived on the scene with the support of Duhalde, but later they fell out.

At that time I remember public opinion saying that Duhalde could never return to politics, but he said, "In the next crisis they'll come looking for me. I'm a good fireman and brave enough to make unpopular decisions". He was right.

Today everybody knows that only Duhalde can tame the disparate politics in Buenos Aires Province (ottonote; economic powerhouse region of Argentina and key state for all politicians). He has a close relationship with the five or six big owners of Argentina and with Nestor losing power and influence the opposition is looking to take advantage. Duhalde knows he cannot be a candidate himself but he is gathering all the conservative opposition around him, uniting the right-wing Peronists, the liberals, the oligarchy and the powerful rural landowners. Macri, Solá and Francisco de Narvaez are his candidates.

Obviously none of them can publicly declare they are 'employees' of Duhalde, but we all know that 'The Godfather' is the power behind this alliance. It's difficult to explain to those not versed in Peronist history, but the typical oligarchic power in Argentina needs Duhalde like a mafia capo to manage the common people and make the economic decisions that those powers need.

I only ask that all who vote for Macri realize that in fact they are voting for Eduardo Duhalde.

Firma y sello, El Porteño

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