Cablegate: Media Reaction; Clashes in Chile; Sarkozy's Comments On

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OO RUEHWEB

DE RUEHBU #1828/01 2561338
ZNR UUUUU ZZH
O 131338Z SEP 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9233
INFO RHMFISS/CDR USSOCOM MACDILL AFB FL//SCJ2//
RULGPUA/USCOMSOLANT

UNCLAS BUENOS AIRES 001828

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; CLASHES IN CHILE; SARKOZY'S COMMENTS ON
ARGENTINA; IMPACT OF THE WORLD FINANCIAL CRISIS ON ARGENTINA;
09/13/07

1. SUMMARY STATEMENT

The most important international stories include the murder of a
Chilean police officer on the 34th anniversary of the coup d'etat
against former Chilean President Salvador Allende; French President
Nicolas Sarkozy warning Argentina and other emerging powers that
they should further open their industries in exchange for a
reduction in farm subsidies; and the allegedly negative impact of
the world financial crisis on Argentina's economic performance.

2. OPINION PIECES AND EDITORIALS

- "Narcos impose terror on (Chilean) poor and marginal inhabitants"

Msnica Gonzlez, international columnist of leading "Clarn," writes
(09/13) "... Yesterday's (murder of a police officer) was the
culmination of a confrontation among drug dealing gangs that took
advantage of social protests and the commemoration of the day on
which Chile buried its democracy in 1973 to strengthen their
territorial domination. As happened in Brazilian 'favelas,' drug
traffickers, which are embedded in the ring of poverty surrounding
Santiago, want to impose their power on other gangs, so later,
through violence, keep police off their streets intending to win
over the poor residents with fear and the carrot: distributing food
and work for women and youth as small drug distributors. The terror
of delinquents has today replaced the terror that Pinochet's secret
squads imposed in the past... The police officer killed yesterday
was victim of an ambush in which one patrol was hit by crossfire
from three different directions. It is either the beginning of a
second phase of power clashes among drug dealers or the rise of an
extremist group seeking a place among the three million Chileans who
make less than five hundred dollars per month."

- "The French president criticizes Argentina"

Luisa Corradini, columnist of daily-of-record "La Nacisn's" "Economy
& Business" supplement, writes (09/13) "French President Nicolas
Sarkozy warned Argentina and other emerging powers, such as Brazil,
China and India, that they should accept 'the duties of powerful
countries' if they want 'the same rights' as powerful countries.

"He said: 'France demands reciprocity, France demands balance.
France demands preferential treatment for the community.' Sarkozy
warned that he would oppose every Doha Round agreement at the WTO
that 'is against French interests.' In the framework of the Round,
wealthy countries claim that developing countries should further
open their industries to international competition in return for a
reduction in agricultural protectionism (which consists of farm
subsidies and import tariffs).

"Sarkozy's statement... is particularly important because it is a
turning point in French agricultural policy. He announced that
during the EU French presidency in the second half of 2008, he would
open a 'discussion' aimed at establishing a new Common Agricultural
Policy (CAP).

"... Sarkozy said he wants the upcoming common agricultural policy
to be defined on the basis of 'an unquestionable principle of
community preference.' This means that in the event the other 26 EU
countries accept his opinion, Europe will reinforce its
protectionist arsenal to promote its production."

- "Gone with the wind"

Business-financial "El Cronista" carries an opinion piece by Agustn
A. Monteverde, an economist from M&A Inc., who writes "... At the
first signs of a world financial crisis, many analysts maintained
that (Argentina's) fiscal situation, trade surplus, reserves and
relative isolation could protect the country.

"Our assessment was that those supposed strong points are instead
vulnerabilities.

"... The fact that Argentine debt has been the most punished in the
region during recent weeks revealed that the alleged strong points
were an illusion. The country's debt default, judicial insecurity,
frozen prices, manipulated inflation rate... as well as its refusal
to honor commitments to holdouts are factors that weigh negatively
with investors.

"In view of deteriorated fiscal conditions, and in light of
historical experience, the people have again purchased dollars
because they anticipate that the structural increase in public
expenditures could be liquidated through a new devaluation.

"Interest rates, the dollar value and the increasing inflation rate

make up a menacing scenario for the country's public debt... And, if
the bond slump is prolonged, the solvency of the financial system
will be endangered - 30 percent of its portfolios are exposed to
government risk."

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

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