Cablegate: Media Reaction; Iraq; the Argentine Presidential Couple;

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

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E.O. 12958: N/A
TAGS: KPAO OPRC KMDR PREL
SUBJECT: MEDIA REACTION; IRAQ; THE ARGENTINE PRESIDENTIAL COUPLE;
ARGENTINE DEBT TO THE PARIS CLUB; 09/14/07

1. SUMMARY STATEMENT

Today's major international opinion pieces cover US President Bush's
announcement of "gradual troop cuts" in Iraq; Argentine First
Lady/Senator Cristina Kirchner's trips abroad; and the impact of the
international financial crisis on Argentine banks as well as the
country's ongoing negotiations on its debt to the Paris Club.

2. OPINION PIECES AND EDITORIALS

- "Bush starts gradual troop cuts from Iraq"

Hugo Alconada Mon, Washington-based correspondent for
daily-of-record "La Nacisn," comments (09/14) "Determined to
capitalize on the first and still premature results of a military
escalation in Iraq, US President George W. Bush made an announcement
which at first glance seems contradictory - the withdrawal of the
first 5,700 soldiers from Saddam Hussein's territory in order to be
able to extend the presence of US troops in the country.

"... Bush said his order was based on the very controversial
'progress' obtained... by the deployment of an additional 35,000
troops ordered by the president himself last January 10, at the
suggestion of his new military commander in Iraq, General David
Petraeus.

"... In this way, Bush announced a withdrawal that will leave him
with more troops than last January, while sending a signal to US
public opinion, which is fed up with the conflict.

"Only 30 percent of Americans currently approve of the Republican
administration's war strategy compared to 56 percent who do not
believe that the US will succeed in Iraq. However, those percentages
actually reflect a slight increase in the support for the White
House based on the lower violence rates in Baghdad and its
surroundings.

"... According to the US Pentagon's plans..., the idea is to
continue withdrawing troops in early 2008, although some 132,000
soldiers would be staying in Iraq as of July. While those troops
could stay there until 2009 or 2010, Bush avoided making reference
to those dates. Instead, he pointed out that he ordered Petraeus and
his Ambassador to Iraq, Ryan Crocker, to submit a new report on
Iraq's political and military situation by next March.

"In order to move forward, the White House also needs Iraqi leaders
to reach agreement instead of inciting sectarian killings.

"... The White House's most important challenge is the Democratic
opposition, which considers his announcement is another lie."

- "Both sides now"

An editorial in liberal, English-language "Buenos Aires Herald"
reads (09/14) "Which is better - is it more important to be
recognized in a wider world or does political power, like charity
begin at home? The presidential couple has experienced both ends of
this question with First Lady Senator Cristina Fernndez de Kirchner
obtaining the extraordinary recognition of being officially received
by the government chiefs of Germany and Austria when merely a
presidential candidate whereas President Nstor Kirchner's faltering
grip on his native province of Santa Cruz was underlined on
Wednesday by the way violent clashes in the perennial trouble-spot
of Caleta Olivia overshadowed his campaigning in Ro Gallegos.

"... Over and above the thorny question of whether or not the German
and Austrian leaders were doing the right thing in thus favoring a
candidate..., did Mrs. Kirchner's Germanic trip do anything to
clarify any pending international issues? To settle the Paris Club
debt while maintaining the Kirchners' insistence on shutting out the
IMF or to unblock the Doha Round which is being obstructed by
Argentina's increasingly protectionist attitude towards its industry
just as much as by any farm subsidies on the part of the developed
world?... Senator Kirchner's appeals to invest in growing Argentina
remain virtually a dead letter while the Paris Club debt remains
unresolved because no investor from the creditor countries can count
on any state guarantees or credits while this default persists. As
for her husband, Wednesday's clashes show him to be vulnerable to
aggressive protests with no guarantee against their repetition...

"Two sides of the coin, then, for the presidential couple but does
either side have any true bearing on the nation's real problems?"

- "The (Argentine) Government is concerned about increasing interest
rates"

Leading "Clarn" carries an op-ed by economist Marcelo Bonelli, who

writes (09/14) "An internal paper circulating in the (Argentine)
Government clearly warns that private banks decided to take measures
to protect themselves from the international (financial) crisis, and
set off an unexpectedly large increase in Argentina's lending
costs.

"... Local bankers from ADEBA (Asociacisn de Bancos Argentinos)
(Argentine Banking Association) confirmed another decision - they
decided to cut loans to strengthen their position - they want to
have abundant liquidity that will help them face any unexpected
crisis. The Argentine Government considers this 'ultraconservative'
attitude unjustified for several reasons - the Government has
confidential information that the US Federal Reserve will lower

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interest rates at next Wednesday's meeting, which will alleviate
international tension; and local banks have higher reserves than the
amount required by the Central Bank... In this way, exchange rates
will have to depreciate towards the end of September, and they would
only remain high until after presidential elections due to
uncertainty.

"The Argentine Government will assess the situation in detail during
its trip to the US. Manhattan will be another important stop in
Cristina Fernndez de Kirchner's election campaign.

"The fact that many G7 leaders helped to make the presidential
candidate look good did not pass unnoticed by the business world...
The support for Cristina Kirchner has not dispelled concerns
regarding how she will manage or complaints from multinational
corporations about the Kirchners' alleged anti-business posture.

"However, G7 support would be strong and based on their belief that
the senator could guarantee governance in Argentina, something that
the opposition does not guarantee.

"The delegation to be sent in October to the IMF could be used to
hold talks with G7 ministers, including US Treasury Secretary Henry
Paulson in search for a solution.

"The renegotiation of the country's debt to the Paris Club has
strategic importance. It could be the first successful opening to
the world of an eventual government of Senator Kirchner, but it
could also have a strong economic impact - at a moment when
obtaining funds is increasingly difficult, it could pave the way for
institutional funding from powerful nations for investment in
Argentina."

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

KELLY

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