Cablegate: Media Reaction; Argentine-Venezuelan Ties; Global Financial

VZCZCXYZ0007
OO RUEHWEB

DE RUEHBU #1580/01 2261217
ZNR UUUUU ZZH
O 141217Z AUG 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8899
INFO RHMFISS/CDR USSOCOM MACDILL AFB FL//SCJ2//
RULGPUA/USCOMSOLANT

UNCLAS BUENOS AIRES 001580

SIPDIS

STATE FOR INR/R/MR, I/GWHA, WHA, WHA/PDA, WHA/BSC,
WHA/EPSC
CDR USSOCOM FOR J-2 IAD/LAMA

SIPDIS

E.O. 12958: N/A
TAGS: KPAO OPRC KMDR PREL
SUBJECT: MEDIA REACTION; ARGENTINE-VENEZUELAN TIES; GLOBAL FINANCIAL
CRISIS' IMPACT ON ARGENTINA; 08/13/07

1. SUMMARY STATEMENT

Weekend international stories are related to the current status of
Argentine-Venezuelan relationship following the scandal of the
800,000-dollar suitcase found at Jorge Newbery Airport; and the
impact of the global financial crisis on Argentine economy and
upcoming elections.

2. OPINION PIECES AND EDITORIALS

- "The trap of impunity"

Ricardo Kirschbaum, general editor of leading "Clarn," writes
(08/12) "Speculation and poisoned versions about the suitcase
scandal are aimed at finding out the destination of almost 800,000
dollars and who made the whole thing public. Imaginative sources
have added new accounts that could be summed up in three
categories.

"First, the Venezuelan who brought the money is, reportedly, not a
successful oil businessman but an intelligence agent who regularly
traveled from Buenos Aires to Montevideo to bring funds for social
and political organizations supported by Chvez both here and in
Uruguay.

"A second rumor is linked to international politics. According to
this version, the USG, which monitors Chvez's moves, is reported to
have warned (local authorities) about the flight and its cargo. This
could be related to a ferocious dispute within Kirchnerism between
those who already know that they will not remain in power if
Cristina wins the presidency and those who will. There is something
else - the dispute over the airports control.

"The third and prevailing version is that a payment of favors was
made to some government official. Whatever the truth is, there is
another element adding mystery to the facts - the involvement of the
Yabrn network.

"All this is a political bomb that has just exploded in the face of
the government, which has distanced itself and has bluntly fired one
of the traveling government officials. What is obvious is that the
procedure is not unusual and that frequent impunity must have ruined
them."

- "A scandal spurring US concern"

Ana Baron, Washington-based correspondent for leading "Clarn,"
writes (08/11) "... The suitcase found in Jorge Newbery Airport had
a huge impact on US newspapers. Why?

"The Bush administration, Capitol Hill and investors have closely
followed the relationship between Chvez and Kirchner and the
suitcase does nothing but confirm how ambiguous and shadowy it is.

"... The scandal does nothing but deteriorate the image of the
Kirchner administration. While everyone so far took it for granted
that Cristina would win the presidency, 'Los Angeles Times'
reprinted the question by Fernando Gonzlez, from 'Clarn' - 'How
many more blows can Cristina's lead in the opinion polls handle?'

"The atmosphere does not favor the predictable image presented by
Cristina to investors gathered in Buenos Aires during the Council of
the Americas conference."

- "The US believes the (suitcase) case will affect Cristina
Kirchner"

Hugo Alconada Mon, Washington-based correspondent for
daily-of-record "La Nacisn," writes (08/12) "... With the passing of
hours, (Guido Alejandro) Antonini (Wilson) becomes walking proof of
the complex relationship between the Kirchner and Chavez
administrations in the eyes of both Republicans and Democrats...

"The prevailing view among the staff of US Assistant Secretary for
Latin America Tom Shannon is that Kirchner approached Caracas as
much as he could to obtain as much money as possible...

"A Washington source told 'La Nacisn' that '(Argentina's) close
rapprochement to Chvez can be negative for Argentine interests, and
in fact it is.' Democratic candidates, including Hillary Clinton,
Barack Obama and Bill Richardson, also agree on this point...

"... Peter Hakim, head of the Inter-American Dialogue studies
center, told 'La Nacisn' 'Even if Cristina Kirchner wanted it, she
would not find it so easy to distance herself from Venezuela and get
closer to the US, when she will have to combine both continuity (of
her husband's administration) and change.' 'The US will not do much

and it cannot do much in terms of its ties to Argentina, to this
administration or the next one, and much less if Argentina decides
to continue counting on Venezuela, something which irritates
Washington.'"

- "Markets also vote"

An editorial in liberal, English-language "Buenos Aires Herald"
reads (08/13) "Argentina has been in no way immune from the plunges
hitting world financial markets in the latter end of last week, thus
showing that countries reluctant to globalize even on favorable
terms are condemned to globalize involuntarily. Even Argentina's
immunity from the specific cause of this latest global financial
crisis... thanks to Argentina's cash-down housing culture does not
prevent havoc on a broader front because Argentina is hit anyway by
a US slowdown, by the general contagion and by the retreat from
emerging markets as investment funds massively play it safe with US
Treasury bonds, etc.

"The Nstor Kirchner administration should be deeply worried by a
crisis of these dimensions with only 10 weekends lying between now
and election day because it threatens the global underpinnings of
Argentina's boom of the last four years... The crisis goes beyond
stock market bears...

"This crisis may be bad news for the election campaign but the
latter should not be allowed to interfere with crisis management.
Argentina should be increasing its fiscal surplus in this global
climate, not squandering it on electioneering. Apart from the fiscal
surplus, Argentina is not entirely defenseless against the crisis -
Argentina is not directly vulnerable to the immediate cause of the
crisis thanks to the solid basis of its housing market... while
Central Bank reserves top 43 billion dollars. But too much obstinacy
in the attitude that the elections are more important than the
crisis and the exposure to turbulence could reach dimensions which
would lose the elections."

To see more Buenos Aires reporting, visit our
classified website at:
http://www.state.sqov.gov/p/wha/buenosaires

WAYNE

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