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Cablegate: Media Reaction; Obama's Decision to Abandon Missile Defense

VZCZCXYZ0008
OO RUEHWEB

DE RUEHBU #1044/01 2611826
ZNR UUUUU ZZH
O 181826Z SEP 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4366
INFO RHMFISS/CDR USSOCOM MACDILL AFB FL//SCJ2//
RULGPUA/USCOMSOLANT

UNCLAS BUENOS AIRES 001044

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; OBAMA'S DECISION TO ABANDON MISSILE DEFENSE
SHIELD IN EUROPE; IMPACT OF THE ARGENTINE MEDIA DRAFT BILL ON
WASHINGTON; ARGENTINE FOREIGN DEBT SWAP; 09/18/09; BUENOS AIRES

1. SUMMARY STATEMENT

Today's most important international opinion pieces are focused on
President Obama's decision to abandon the missile defense shield in
Europe; the impact of the Argentine broadcasting draft legislation
on Washington; as well as a proposal of foreign banks to Argentina
for the country's debt swap reopening.

2. OPINION PIECES AND EDITORIALS

- "Obama abandons Bush's controversial antimissile shield"

Daily-of-record "La Nacion" front-pages an opinion piece by its
Washington-based correspondent Silvia Pisani, who writes (09/18) "In
the largest rupture in the US defense policy of his predecessor,
George W. Bush, President Barack Obama announced yesterday the end
of the so-called 'anti-missile shield' in Eastern Europe, which was
defended by the White House as a need to tame the 'Iranian threat.'

"... It is an impressive turn with an impact on the Western
defensive and diplomatic map, which was welcomed as a big triumph by
Russia because the establishment of an anti-missile shield raised
strong tension between Moscow and Washington.

"... Obama did point out that there will be another system to
confront eventual missile threats. However, he pointed out that for
this purpose they will use a technology that differs from that
proposed by Bush and with a lesser cost.

"In a country going through economic recession and with deficit in
its public accounts, the economic argument played a key role in the
surprising notification. Nonetheless, in spite of this domestic
wink, the debate has sparked amid the indignation of the Republican
opponents due to what they believe is a 'risk' to the US safety.

"... Obama had said that it does not come down to abandoning the
defense of the region but to replacing it by 'a new defensive
architecture in Europe, which will bring better and more efficient
results for the US and its NATO allies'. Nevertheless, analysts
interpreted it as a clear gesture of strategic realignment in search
of Russia's support to put a brake on Iran.

"Pentagon sources pointed out that the decision was based on
intelligence information that Iran is now focused on the development
of short and medium range missiles instead of the long-reach
inter-continental missiles originally feared.

"From an economic point of view, it is a respite for the economies
of Washington and Moscow, the two confronted actors ever since the
downfall of the Berlin Street."

- "A struggle over Argentina's foreign debt swap"

Leading "Clarin" carries an op-ed piece by economic columnist
Marcelo Bonelli, who writes (09/18) "Foreign banks made a
counter-proposal to Argentina to have it reopen its foreign debt
swap and avoid the loss of a 30-billion-dollar business...

"'Clarin' confirmed that this week the committee of banks made up by
the Citibank, Deutsche and Barclays officially notified to the
Economy Ministry that it was willing to grant 'fresh money' - one
billion dollars. However, they will do it on one condition - that
the Government delivers the control on the reopening of the holdouts
debt.

"In this way, bankers changed their initial position, which had
engendered points of disagreement with Argentina.

"... The issue is not easy. The money offered by foreign banks is
remarkably inferior to the amount they offered last year.
Additionally, the Economy Minister would be tied to this trio of
banks and would not solve its funding problem for next year - at
least they need some five billion dollars.

"The issue could well be tackled at the G20 summit and during the
Council of the Americas encounter, where CFK will question again the
IMF past (in an old-fashioned critical statement) when world
financial hubs only talk about the IMF future...

"For the time being, Barack Obama will not receive Cristina
Kirchner... The White House's detachment is due to the concrete
questionings from the State Department and the Treasury Department
to the Argentine Government.

"A confidential report prepared by two Treasury envoys to Buenos
Aires is critical and questions the anti-business climate of the


Kirchner administration.

"Bill Block and William Lindquits met with businessmen and with
Amado Boudou. In spite of the Economy Minister's pro-market talk,
they had the impression that Argentina has strong mismatches and
that the Government does nothing to correct them, except distorting
the INDEC figures. They also concluded that Argentina is not fully
taking advantage of the world financial rebound due to the Kirchner
administration's confrontational attitude."

- "Questionings about the media draft bill have an impact even on
Washington"

Ana Baron, leading "Clarin's" Washington-based correspondent,
comments (09/18) "The Department of State refused to give an
official opinion on the media draft bill approved by the Argentine
Lower House. They said: 'It is an Argentine domestic issue.'
However, the questionings on the issue had an impact yesterday in a
meeting held by Argentine legislators, government officials and
academics with the head of the Southern Cone Division of the
Department of State and with former number two at the US Embassy in
Buenos Aires, Milton Drucker...

"After the meeting, one of the attending Argentines quoted Drucker
that 'the US will never support something that does not honor the
agreements reached.'

"According to the source, the USG officer said that 'any measure or
legislation that implies an infringement on private property will
have to be compensated and every draft bill should honor
intellectual property rights. And if this is not the case, it will
keep on fueling the idea that Argentina does not honor contracts,
something that has scared away investors lately.'

"... After that, Drucker pointed out he had not said exactly that,
but that he only spoke in general terms...

"... It is not new that the US is concerned over Argentina not
honoring contracts and over the climate of investment in the
country...

"Furthermore, the new US ambassador to Argentina Vilma Martinez held
several meetings in Washington with former US diplomats, lobbyists,
businessmen and bankers with interests in Argentina, who complained
about lack of clear rules, permanent infringement on contracts, lack
of predictability and the problem posed by holdout bondholders."

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

MARTINEZ

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