Back to our "Boring" Sunday Headline News - July 20th 2008

The Farmer/Government conflict is over ... or is it?

Clarin and La Nación, Argentina´s largest papers, are still covering the fallout of the conflict - which is, for Cristina Kirchner and the FPV (Frente para la Victoria) bunch, not over yet.

In La Nación, Province of Buenos Aires governor (and ex-VP alongside hard-line Néstor Kirchner) is asking for "self-criticism" amidst the official radio silence on the conflict's resolution last week. The Senate's vote and later derogation of Resolution 125 marked the long-awaited victory for the farmers but opened a "Now what?" phase which has been exacerbated by the President´s silence regarding this matter.

The second news-making event is a calculation of our National Savings if subsidies were cut. Ex-President Kirchner elaborated and intricate network of subsidies for basically all economic activities for which prices were "frozen" (electricity, gas, water, bus, trains, subways ...). Untangling it without setting free the seven-headed beat of inflation will be no easy task, especially when there is no real conviction of even believing that inflation is a problem to start with.

The third piece of news is a Tango show in La Boca ...

Clarín is also dealing with thje fallout of the conflict. Two Cobos followes, who had a job in the government, were apparently asked to resign. This has been one of many official measures taken from the government to ensure VP Cobos feals the heat of his decision. Last week, when he asked for the Tango 02 (the equivalent of the Air Force 1 for the VP) to head home to Mendoza (Argentinean province neiughboring Chile), his request was denied by Oscar Parilli, the President's secretary. He has gotten harrassed by FPV supported and told off by countless politicians. The crisis which he has set off in the government will only be properly measured in a few months.

Although he has denied resigning, I speculate he will run for a Senator post next year; this would give him an exit with some dignity and allow the President to save face after having her VP issue the decisive vote
against her export-tax bill.

Other news refer to Martín del Potro´s recent tennis victories.

(La Nación cover is not reproduced because the new brilliant online identity prevents me from copy-pasting the cover).

Reality: Expect the Unexpected

Argentina is the country of the unexpected.


In 2003, when Menem was the front-runner in the presidential elections and favorite for his third term. However, days before the ballotage (second round), he surprisingly pulled out of the race, leaving Nestor Kirchner, an unknown provincial governor, a job as President with 22% of votes.

A lot of water has gone under the bridge since then, but one truth remains: it is almost impossible to predict what might happen in Argentine politics. This week's Senate vote on Resolution 125, regulating the March 11th increase on soybean export tariffs was not the exception.

4 months of escalating conflict between the agricultural sector and the government had been enough and no solution was forecoming: therefore, Julio Cobos; the vicepresident from the traditional Radical party turned Kirchner follower, prompted Mme President to send the resolution to Congress. Last week, a tight battle was fought and the Kirchners won 129 to 122 in the Lower Chamber.

Before the vote in the Senate, both groups rallied their supporters (ex-President Kirchner had less than 100k supporters in Congress, the farmers had 200k plus in Palermo, a high-end neighborhood north of the city), and while the farmers won the street, another narrow victory was discounted by the Kirchners. Little did they know that, not only would they not win, but they would loose under Vice-President Cobos' "un-tying" vote (voting had ended 36 to 36, and the Constitution said in this case the President of the Senate would vote and untie).

24 hours earlier, ex-President Kirchner promised in his rally that the Peronist party would respect the Senate's decision, prompting the farmers to do the same (and of course discounting a sure victory).


As luck would have it, at 4am and after 18 hours of discussions, things were tied in the Upper Chamber, and the hour of truth came for Cobos. Would he prioritize his standing and point of view, or would he vote as his running mate and party? He voted with his heart, and the unexpected became part of history once again. Today, the resolution was revoked and tax levels returned to March 10th levels (until a new plan is put in place, as a result of a reasonable and transparent process and not as a decree).

President Cristina Fernandez and ex-President Kirchner had vowed to respect the Senate's decision, and they had resolved against the Resolution. All of the political capital spent during the 127 days of conflict had been uselessly dilapidated. Society - and Congress - had put a large STOP sign in front of the Kirchners and provided the largest political defeat since 2003. She stands weakened now but, what seems worse, the opposition stands tall. Damage control may last as long as the end of 2009, when partial Congress elections will be held, and the opposition will most likely recover seats from the Kirchners.

Then again, always expect the unexpected ...