1. IRAN AND ARGENTINA: THE DEFECTORS’ TALE (The Wall Street Journal)
2. CITIGROUP UNIT SAYS U.S. JUDGE ALLOWS INTEREST PAYMENTS IN ARGENTINA (The Wall Street Journal Online)
3. US COURT OK’S CITIBANK TO PROCESS ARGENTINA BOND PAYMENTS (The Washington Post)
4. MINISTER: BRITAIN TO ADD TO FALKLANDS ISLANDS DEFENSE (The Washington Post)
5. ARGENTINA CONTINUES ITS DOWNWARD SPIRAL (The Miami Herald)
6. CITIGROUP SAYS COURT WILL LET IT PAY ARGENTINE BOND INTEREST (The New York Times)
7. UK PLEDGES TO BOOST FALKLANDS DEFENCES (Financial Times)
8. AN ARGENTINE BOND REPRIEVE — OR IS IT? (Financial Times)
9. NEVER THE NEXT GREAT POWER: ARGENTINA’S FUTURE IS ALWAYS STUCK IN THE PAST (Reuters Blog)
10. JUDGE MAKES RULING BUT ARGENTINA DEBT FIGHT RAGES ON (Reuters News)
11. U.S. COURT AUTHORIZES CITIGROUP TO PROCESS ARGENTINE BOND PAYMENTS (Reuters News)
12. SOVEREIGN ISSUERS SEEK TO THWART ARGENTINA-STYLE ATTACKS BY FUNDS (Reuters News)
13. ELLIOTT EMITS RAY OF PRAGMATISM IN ARGENTINA FEUD (Reuters News)
14. BRITAIN SAYS TO BOOST DEFENCE OF DISPUTED FALKLAND ISLANDS (Reuters News)
15. HERE’S WHY U.K.-ARGENTINA TENSIONS ARE RISING AGAIN OVER THE FALKLANDS (Time)
16. BRITAIN MODERNIZES FALKLANDS FORCES IN VIEW OF ARGENTINE THREAT (Bloomberg News)
17. ARGENTINA’S PROSPECTS AFTER FERNANDEZ BRIGHTEN, DEVELOPER SAYS (Bloomberg News)
18. ARGENTINA’S ECONOMY GROWS AT SLOWEST FULL-YEAR PACE SINCE 2009 (Bloomberg News)
19. CITIGROUP SAYS JUDGE ALLOWING TWO ARGENTINA BOND PAYMENTS (Bloomberg News)
20. ARGENTINA ECONOMY: QUICK VIEW – OFFICIAL DATA SHOW GDP GROWING SLIGHTLY IN (Economist Intelligence Unit – ViewsWire)
21. ARGENTINA: COUNTRY OUTLOOK (Economist Intelligence Unit – ViewsWire)
22. CITIGROUP ALLOWED TO PROCESS ARGENTINE BOND PAYMENTS (Business News Americas)
23. COMPROMISE AGREEMENT BETWEEN PAYING AGENT AND “HOLD-OUT” PLAINTIFF REMOVES RISK OF END-MARCH ARGENTINE DEFAULT OR EXPROPRIATION (IHS Global Insight Daily Analysis)
24. ARGENTINA SAYS ECONOMY EXPANDED 0.5% LAST YEAR (Dow Jones Institutional News)
25. ARGENTINA’S ECONOMY STAGNATES AGAIN IN Q4 AMID INCREASED POLICY DEBATE FOR FUTURE GOVERNMENT (IHS Global Insight Daily Analysis)
26. FUEL FOR THOUGHT: PREMIER, NOBLE START DRILLING AGAIN OFF FALKLAND ISLANDS (Platts Commodity News)
27. SECRET NAZI HIDEOUT BELIEVED FOUND IN REMOTE ARGENTINE JUNGLE (The Washington Post)
28. NAZI LAIR FROM WORLD WAR II FOUND HIDDEN IN ARGENTINA JUNGLE (The Huffington Post)
29. AT GEORGETOWN, SOCCER ROYALTY ARRIVES (The Washington Post)
30. ELECTIONS IN ARGENTINA (Open Democarcy)
1. IRAN AND ARGENTINA: THE DEFECTORS’ TALE (The Wall Street Journal)
By Mary Anastasia O’Grady
March 22, 2015
Three former Venezuelan insiders say Hugo Chávez brokered a cash-for-nuclear-technology deal.
March 22, 2015 7:00 p.m. ET
Did Hugo Chávez act as a bagman for Iran in its effort to get nuclear technology from Argentina? That’s the claim made by three former members of the Venezuelan dictatorship’s inner circle cited anonymously in a March 14 story in the Brazilian magazine Veja.
The magazine says it didn’t name the defectors, interviewed in Washington, to protect their family members back in Venezuela. But it reported that they were questioned separately and each said there was a deal in January 2007 between Chávez and Iranian President Mahmoud Ahmadinejad in Caracas. Venezuela would deliver Iranian money to Argentine officials in exchange for two favors for Tehran.
The first favor they described, according to Veja, was that Argentina would cover up Iran’s role in the 1994 terrorist attack on a Jewish community center (known by its Spanish initials as AMIA) in Buenos Aires. The second favor was that Argentina would “share their long experience in [a] heavy-water nuclear reactor, an old-fashioned, expensive and complicated system but one that allows plutonium to be obtained from natural uranium.”
Unnamed sources raise doubts in any news story. But Veja is one of Brazil’s most important and reputable news outlets, and a third party that I have reason to trust has confirmed to me that the interviews took place.
A greater reason for skepticism is that, according to Veja, the defectors are talking to U.S. law enforcement about Venezuela’s “participation in international drugs trafficking and supporting terrorism.” This suggests they may be looking for protection in exchange for what they say about the inner workings of the dictatorship. In other words, they have motivation to tell tales that impress.
Yet nothing that Veja reported contradicts what is already known about Venezuela’s relationship with Iran, and much of it fits with what Argentine federal prosecutor Alberto Nisman reported in a 2006 indictment of seven high-ranking Iranian clerics, government officials and military officers for the AMIA bombing. Nisman was found dead in his apartment in January, the day before he was to give testimony about what he said was a coverup hatched by President Cristina Kirchner and Tehran to let the indicted Iranians off the hook.
Washington-based regional security analyst Joseph Humire considers the Veja story credible. He cited it in testimony before a House joint subcommittee on the Western Hemisphere and the Middle East on Wednesday.
Buenos Aires and Tehran had a blossoming relationship in the 1980s thanks in part to Argentina’s willingness to share nuclear technology with Iran. When President Carlos Menem took office in 1989, Argentine foreign policy shifted 180 degrees in favor of the U.S. and its allies.
Iran was sore about that according to Nisman’s 2006 indictment of the Iranians. “There is sufficient evidence to prove that the [AMIA] attack was carried out in Argentina owing to the Argentine government’s unilateral decision to terminate the nuclear materials and technology supply agreements that had been concluded some years previously between Argentina and Iran,” the Nisman report said. The same report says that “at this period the Iranian government felt that it was crucial for Iran to develop its nuclear capacities.”
The unnamed defectors claim that among other means to manipulate Argentina in favor of Iran, Venezuela arranged direct cash transfers. In August 2007, when Argentine customs officials discovered a suitcase containing an undeclared $800,000 in a plane from Venezuela, most observers chalked it up to Chávez’s efforts to spread his influence around the region. But one of the defectors told Veja that the loot was a gift from Iran for Mrs. Kirchner’s presidential campaign.
The claim in the Veja story that the cash originated in Iran and that a twice monthly Caracas-Damascus-Tehran flight between 2007 and 2010 facilitated its transfer to Venezuela is interesting. Veja notes that Venezuela’s then-foreign minister Tareck Zaidan El Aissami Maddah, now the governor of Aragua and a bigwig in the United Socialist Party of Venezuela, played a key role in running those flights.
Veja reported that none of the three defectors could say if the nuclear technology was transferred. But one said that he does “know [Argentina] received a lot through legal means” by way of the purchase of Argentine bonds, “and illegal means—suitcases filled with cash—in exchange for something that was very valuable to the Iranians.”
Mr. Humire noted in his March 18 congressional testimony that “if this is true, then I believe we have all underestimated Latin America’s importance to the Islamic Republic. And by extension can no longer afford to divorce the continuing nuclear negotiations with the P5+1 and Iran’s activities in the region.”
The defectors may be spinning fiction. But given Argentina’s prior practice of sharing nuclear technology with Iran, and Tehran’s efforts to penetrate Latin America, it would be foolish not to take their allegations seriously.
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2. CITIGROUP UNIT SAYS U.S. JUDGE ALLOWS INTEREST PAYMENTS IN ARGENTINA (The Wall Street Journal Online)
By Taos Turner
22 March 2015
Citi Argentina plans interest payments on March 31 and June 30
BUENOS AIRES—Citigroup’s Argentine unit said over the weekend that U.S. District Judge Thomas Griesa has given it a green light to make interest payments to local bondholders.
The judge’s decision, which Citi Argentina said was issued on Friday, comes after he had ruled earlier this month that the bank couldn’t make the payments. The judge’s previous decision, which stems from a yearslong lawsuit that Argentina lost against a small group of hedge funds in the U.S., put Citigroup in a legal bind by forcing it to choose between obeying U.S. and Argentine law.
Judge’s Griesa’s reversal is a relief for Citigroup. In a filing with the U.S. Securities and Exchange Commission last year, Citigroup said the failure to make its bond payments in Argentina could lead to “sanctions, confiscation of assets, criminal charges or even loss of licenses” and expose “Citi and Citi Argentina to litigation.”
In a statement on Sunday, Citi Argentina said it would make interest payments on March 31 and June 30 on dollar-denominated bonds that Argentina’s government issued under Argentine law. Earlier this month, the bank said that because of the judge’s previous ruling it would exit the custody business in Argentina.
“The custody business represents approximately 2% of Citi Argentina’s income and by its nature has no significant relationship with the rest of its banking activities,” Citi Argentina said on Sunday. “Citi has played an important role in Argentina’s economy for more than 100 years and hopes to keep doing so for decades to come.”
Argentina’s Economy Minister had called Judge Griesa’s previous ruling “a shameful excess of his jurisdiction,” saying it could force Citi Argentina to violate local law and lose its banking license.
“Not complying with the law has consequences,” the minister, Axel Kicillof, said at a recent news conference.
The conflict stems from Argentina’s 2001 default on around $100 billion in debt and the subsequent restructuring of defaulted bonds in 2005 and 2010. The hedge funds, led by Elliott Management Corp.’s NML Capital Ltd. and Aurelius Capital Management LP, bought Argentine bonds after the default and sued Argentina in search of full payment.
Last year, Judge Griesa ordered the country to pay the hedge funds what amounts to more than $1.6 billion. Argentina refused to comply with the order, leading the judge to block the country’s effort to pay other bondholders.
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3. US COURT OK’S CITIBANK TO PROCESS ARGENTINA BOND PAYMENTS (The Washington Post)
March 23, 2015
NEW YORK — Citibank says a U.S. court has authorized it to process two debt payments for Argentina without facing contempt charges over a long-running dispute with U.S. bondholders.
The U.S. bank acts as a custodian for some Argentine bonds and has been in the middle of a bitter court fight over the South American country’s debt obligations.
The court stipulated it will not restrict Citi from having its Argentine branch process payments on dollar-denominated Argentine bonds on March 31 and June 30.
Citibank, which issued a statement over the weekend, has said it was getting out of the business of making bond payments for Argentina due to an “unprecedented international conflict of laws.”
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4. MINISTER: BRITAIN TO ADD TO FALKLANDS ISLANDS DEFENSE (The Washington Post)
March 24, 2015
LONDON — Britain plans to add two transport helicopters and an enhanced communications system to its defense systems in the disputed Falklands Islands.
Defense Secretary Michael Fallon said Tuesday that the helicopters would allow Britain to react quickly and decisively to any incidents.
He told Parliament that a regular review of the Falklands’ defenses concluded that systems in place were “broadly proportionate” to the perceived threat.
The islands are claimed by both Britain and Argentina. The two countries fought over the remote South Atlantic islands in 1982 after Argentina mounted an invasion.
Britain plans to spend roughly 180 million pounds ($268 million) in the next decade to improve defense systems and other facilities on the islands.
Fallon also told BBC Radio that press reports about a possible lease of Russian bombers to Argentina are unconfirmed but that Britain must be ready to meet any potential threat.
Late Tuesday, Argentina’s ministry of foreign affairs characterized the military buildup as unnecessary and lamented that Britain didn’t appear to be interested in negotiating a peaceful solution to the longstanding dispute.
“Besides being implausible, it is absolutely unjustifiable that the ghost of the supposed ‘Argentina threat’ is used to increase the British military budget and consolidate the growing militarization of the islands,” a statement from the ministry said.
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5. ARGENTINA CONTINUES ITS DOWNWARD SPIRAL (The Miami Herald)
By Carl Meacham
22 March 2015
March 18 marked two months since the mysterious shooting death of Argentine federal prosecutor Alberto Nisman — and still we still have no answers. A few weeks ago, an Argentine federal judge dismissed the indictment that many believe led to Nisman’s death, citing a lack of evidence. That ruling is now being appealed.
Nisman was shot in the head just hours before he was set to deliver testimony before lawmakers on his indictment of numerous high-level officials, including Argentine President Cristina Fernández de Kirchner and foreign minister Héctor Timerman.
The allegation: They had conducted secret, illegal negotiations with Iran to cover up the involvement of senior Iranian officials in the 1994 bombing of a Jewish community center in Buenos Aires.
The controversial indictment was the culmination of a decade of investigation that, in the end, mapped a significant Iranian terrorist network. The deal allegedly negotiated by Fernández de Kirchner would have completed Iran’s long drive to cover up its activities, an exchange of impunity for economic benefits for Argentina.
President Fernández de Kirchner initially declared Nisman’s death a suicide, though she reversed her story in the face of public indignation. Instead, she now blames rogue officers from her own intelligence services of misdirecting Nisman’s investigation and murdering him, with the objective of framing her for his death. She has since dissolved that intelligence agency, replacing it with one of her own design. She has also accused the United States of promoting a coup d’etat and the Argentine judiciary of seeking to end her presidency prematurely.
In her March 1 speech before the National Assembly, where she spoke for nearly four hours, she aggressively attacked Nisman and her other perceived enemies — but she barely mentioned the reality on the ground: The economy is in shambles, inflation is through the roof, crime rates are on the rise, and public confidence in the government has hit rock-bottom. In a year expected to be a slow ride to the end of this administration, it is increasingly unclear if President Fernández de Kirchner will last until this fall’s presidential election.
Yet the Nisman scandal has brought little attention to what his murder could mean beyond her administration and beyond Argentina’s borders. While Fernández de Kirchner, her vice president, and other higher-ups are mired in allegations of corruption and foreign investment prospects are dubious given the country’s problematic economic policies, hope remained that a new administration could turn things around.
But Nisman’s death has quashed that hope. A new president could improve Argentina’s economy, but strengthening judicial institutions, improving the rule of law, and restoring the government’s credibility will take far longer.
Beyond Argentina’s borders, her decline is part of a broader erosion of democracy in parts of Latin American (and beyond, as in Russia). Destructive populism and authoritarianism have crippled the rule of law, ingrained corrupt patronage, tolerated massive increases in illicit activity, and siphoned billions of dollars out of national treasuries. These governments appear ever more desperate to cling to power by any means.
Those means could include repression of political opposition — a tactic that Nisman’s death could make still more attractive, providing a new tool to quell demands for accountability and transparency. If the Fernández de Kirchner administration emerges unscathed, other radical governments may look to adopt similarly repressive tactics.
This is particularly relevant for Venezuela.
Since Hugo Chávez’s death, Venezuela has descended into chaos. The economy is on the brink of collapse. The Maduro administration has increased its violent repression of anti-Chavista protests, jailing opposition leader Leopoldo López and others on trumped-up charges. A month ago, authorities arrested Caracas Mayor Antonio Ledezma, a move the opposition views as politically motivated, part and parcel to Maduro’s allegations that the opposition is conspiring with Washington to overthrow his government.
Nisman’s death, Ledezma’s arrest, and the anniversary of Lopez’s incarceration may revitalize the protest movements that could eventually help restore democracy to two countries with great weight in the hemisphere. The past year has provided abundant catalysts for change in the face of the undeniable failure of the radical populist model.
So what’s next? Will the downward spirals of Argentina and Venezuela continue, or will there be more to protest for change? Will the governments further suppress opposition voices, or could a “Latin American Spring” flower?
The challenges these countries face must be addressed sooner rather than later. Otherwise, we risk setting a dangerous precedent for autocrats and budding caudillos to increase their repression throughout the region.
Carl Meacham is the director of the Americas Program at the Center for Strategic and International Studies (CSIS). Douglas Farah is a non-resident senior associate with the Americas Program at CSIS and president of IBI Consultants.
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6. CITIGROUP SAYS COURT WILL LET IT PAY ARGENTINE BOND INTEREST (The New York Times)
By Alexandra Stevenson
23 March 2015
There is a new twist in the fight between Argentina and a group of hedge funds that has been playing out in New York courts.
A United States federal court has allowed Citigroup to make interest payments to investors holding $2.3 billion of Argentine bonds due at the end of the month, the bank said on Sunday in a statement.
Citigroup also said that it had been authorized to make another interest payment on June 30.
The move, outlined in an order that is expected to be filed in court on Monday, appeared to be a reversal by Judge Thomas P. Griesa of the Federal District Court in Manhattan. As recently as March 12, Judge Griesa rejected an appeal by Citigroup to make the March 31 interest payments.
The legal back and forth in recent weeks is part of a bigger, bitter battle that traces back to 2001, when Argentina defaulted on nearly $100 billion of government bonds. Most of the investors holding those defaulted bonds exchanged them later for new and discounted bonds.
One small group of hedge funds chose not to. The hedge funds, led by Paul E. Singer’s NML Capital, instead took Argentina to court in New York, seeking full repayment on their bonds.
In a turn that culminated with a second Argentine default last summer, Judge Griesa barred the banks that are processing interest payments for Argentine bonds from making any further interest payments unless they also paid the so-called holdout hedge funds in full.
But in September, Judge Griesa appeared to soften his stance by allowing one of the banks, Citigroup, to make a one-time $5 million payment to a group of investors holding bonds issued under Argentine law. That ruling lifted hopes that it would clear the way for more leniency from the court in the future.
Those hopes were dashed a week ago when Judge Griesa rejected Citigroup’s request to lift an injunction that prevented it from making the March 31 interest payment.
His decision set in motion plans by Citigroup to close its custody business in Argentina, citing ”unprecedented international conflict of laws.”
Citigroup’s lawyers argued that the bank faced ”grave sanctions” from Argentina and could stand to lose its banking license in Argentina if it were not allowed to make interest payments on Argentine bonds.
Argentine officials have remained defiant. ”We will make sure that Argentine banks comply with Argentine legislation because that’s the way it is the world over,” President Cristina Fernández de Kirchner said in a speech on Friday.
A spokesman for NML Capital said Judge Griesa’s latest order followed negotiations between NML Capital and Citigroup: ”Judge Griesa approved this agreement, which applies only to Citibank and was specifically tailored to address the unique circumstances facing Citi Argentina after Citibank announced it was exiting the custody business in Argentina.”
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7. UK PLEDGES TO BOOST FALKLANDS DEFENCES (Financial Times)
By Kiran Stacey
March 24, 2015
Michael Fallon will on Tuesday promise to boost British defences in the Falkland Islands, warning that the threat of invasion by Argentina remains “live”.
The defence secretary will tell MPs that he intends to send more troops to the disputed South Atlantic islands, which Argentina calls the Malvinas and invaded in 1982, prompting a war with Britain.
Mr Fallon would not reveal how many extra soldiers would be sent to help defend the territory. But he told the BBC: “We do need to modernise our defences there to make sure we have sufficient troops and the islands are sufficiently defended.”
He added: “The threat has not reduced. Argentina still sadly makes its claims to the islands, even 30 years after the invasion and the war.”
Argentina has stepped up its claims since 2010, when the UK-based oil explorer Rockhopper found oil in a field north of the islands.
Cristina Fernández de Kirchner, the Argentine president, in 2011 said David Cameron, her UK counterpart, was arrogant to insist the islands should remain British. Earlier this month, Argentina began issuing 50 peso notes featuring a map of the Falklands.
Mr Fallon would not comment on reports that Russia was planning to supply Argentina with 12 long-range bombers.
Britain has about 1,000 troops, including 100 infantry, stationed on the Falklands. The islands are also defended by four Typhoon combat aircraft, one large Royal Navy warship and a small patrol vessel.
But some officials have warned that the scrapping of the Royal Navy’s aircraft carriers, which are currently being replaced, would make the islands harder to defend if Argentina resorted to force.
In 1982, the UK was able to send a sizeable naval force, including two aircraft carriers, down to the South Atlantic to recapture the islands.
Mr Fallon also refused on Tuesday to guarantee that the UK would continue to spend 2 per cent of its national output on defence after the election, despite pressure from Conservative backbenchers.
“The 2 per cent figure is something we agreed at Nato. We are going to be meeting it again next year and then setting the spending totals for the following three years at the spending review later in the autumn, ” said Mr Fallon.
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8. AN ARGENTINE BOND REPRIEVE — OR IS IT? (Financial Times)
By Joseph Cotterill
March 23, 2015
Could there finally be a limit to just how far around the world the pari passu saga goes?
No.
But for a longer answer, read on.
In an order released on Monday, Judge Griesa decided to let Citibank process payments on US-dollar, local-law Argentine paper for a few months while it’s busy working out how to offload the Argentine bond custodian business which is at the centre of its problem.
This problem has been a Hobson’s choice. The judge decided this month that whenever Citibank does process these payments, it’s helping Argentina to evade his injunction to pay holdouts alongside other relevant creditors. Argentina promptly decided that if Citibank doesn’t help it pay its bonds, it will be breaking its law, and that would make life very difficult for Citibank inside Argentina.
By giving the bank some room, Judge Griesa’s decision — citing “unique circumstances” — might seem like a reprieve; even something that the Argentine government (which is getting into the weirdest fights lately) could spin into a victory.
Except where it’s not.
1) First, Citibank has to turf over information to the holdouts while it’s making its retreat, which is of course also within a specific time. It feels a bit like medieval castle warfare where merchants could leave the city under the careful eyes of the besiegers.
2) There’s also the very large caveat within the permission granted by Judge Griesa.
If… Citibank Argentina receives a portion of such payment on behalf of its customers, Citibank Argentina may process that payment in the ordinary course. Such permission shall only apply to Citibank Argentina, and shall not apply to any other party or participant in the payment process on such bonds.
Who else might handle payments to local-law bondholders once Citibank’s released them?
According to the diagram Citibank itself once sent to Griesa trying to explain the difference between foreign-law and local-law bonds, Euroclear and Clearstream potentially handle them next for international holders.
Under the terms of Judge Griesa’s order on Monday, “In connection with the Citibank Withdrawal, Euroclear and Clearstream are permitted, but not required, to transfer their holdings of U.S. Dollar Argentine Law Exchange Bonds to Caja de Valores”. That doesn’t seem to solve this ambiguity in the payment chain.
The shadow of the pari passu litigation hasn’t yet passed over Euroclear and Clearstream’s particular role here. But they have already been named in Judge Griesa’s original injunction — back when it seemed to apply only to foreign-law restructured bonds, rather than extending to local-law ones which have any connection to the world outside Argentina.
The point being, that distinction isn’t what it used to be.
3) This was the bombshell in Judge Griesa’s earlier ruling this month: local-law bonds could be “external indebtedness” for the purposes of the pari passu clause which started this whole mess.
Citibank incidentally agreed not to appeal this decision, so it looks like it’s sticking.
That could matter well beyond Citibank’s predicament. As Anna Gelpern notes, expanding “external indebtedness” effectively shuts down new foreign-currency debt issuance by Argentina, given the deterrent effect on any bank handling the sale abroad. (It’s also going to annoy any other sovereign which has been busy Elliott-proofing the pari passu clauses in any newly-issued debt, but which probably wasn’t watching the “external indebtedness” definition as carefully.)
The holdouts don’t really need to push to broaden the injunction at this point given the strength of the deterrence. They’ve even had an interest in the past in letting some new issuance out — like the Repsol settlement which involved $5bn of newly-minted Argentine paper — because that agreement might provide a blueprint for the government to eventually sit down and negotiate with its pari passu claimants.
On the other hand, Argentina’s Bonar 2024 and Boden 2015 bonds are both trading above par in the current market. Holders of both are probably watching the clock on the Kirchner government leaving office in October (just after the Boden matures). Whether that confidence is justifiable is another matter. Still, both issues are local-law bonds but not restructured debt, which has so far kept them away from the pari passu saga.
Given the terms of Citibank’s ‘reprieve’ — and the fact Argentina hasn’t been forced to the table yet — we’d question how long they’ll stay that way.
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9. NEVER THE NEXT GREAT POWER: ARGENTINA’S FUTURE IS ALWAYS STUCK IN THE PAST (Reuters Blog)
By Daniela Blei
March 23, 2015
Argentina, mired in corruption and ineptitude, has swallowed Alberto Nisman – and the truth.
The stunning death of the federal prosecutor, the day before he was to testify before the Argentine congress about his allegations against the country’s president and a more than decade-old unsolved bombing, has confirmed — as if more proof were needed — that Argentina is its own worst enemy.
Argentina entered the modern world with great expectations. Its European genealogy and natural resources were taken as virtual guarantees of prosperity and progress. Visitors to Buenos Aires produced a literary genre of their own, fawning over the “sumptuous boulevards” of a cosmopolitan city that was heralded as “the capital of the continent.”
This is the starting point for just about every narrative of Argentina. Its “incomplete modernity,” its status as a “stillborn great nation” or a success story that somehow derailed makes it difficult to imagine how to set its history on another course.
Long governed by the politics of victimization and a culture of national lament, Argentines are experiencing a moment of clarity in the wake of Nisman’s death.
Questions surrounding Nisman’s demise have gripped the Argentine public. Why would a high-ranking prosecutor kill himself hours before delivering the most important presentation of his career, which implicates President Cristina Fernández in an international cover-up? Was it suicide or murder made to look like suicide? Rumors and conspiracy theories swirl through the nation.
Nisman was in charge of investigating the 1994 bombing of a Buenos Aires Jewish community center, which killed 84 people, the deadliest terror attack in Argentine history. In his presentation, which has been disclosed, he accuses the president and her foreign minister of striking a secret deal with Tehran. In exchange for cheap Iranian oil, Argentina would create a red herring to convince the world that local right-wing groups, not Iranian officials, were responsible for the blast.
Depending on whom you ask, Nisman was a hero for democracy, a casualty of internecine politics, the marked man of rogue Argentine intelligence agents, or the victim of an international terrorist conspiracy. Some on the anti-U.S. left have even painted him as an agent of the CIA advancing Washington’s agenda against Iran.
Democracy in Argentina has proved disappointing and even dangerous over the 32 years since the end of military rule. Argentina is an atomized society, riven by insecurity and mistrust, where the only collective truth is a sense of constant crisis — economic, political, even moral — that has become a defining feature of daily life.
Fernández leads without long-term policies or plans, as many have noted. She runs the country in a day-to-day mode, putting out fires and garnering support with populist tactics to achieve short-term objectives. Unlike in previous eras, when the military took control of the Casa Rosada presidential palace once a decade, her civilian government is in control. It has a “monopoly on violence,” as sociologist Max Weber said of functioning states. But today the state — ineffective, shrouded in scandal and wracked by economic crisis — does not have a hold on much else.
Argentina has indeed fallen from grace. It was once a promised land of economic opportunity and South American modernity. In the late 19th century, Argentina’s gross domestic product rivaled that of the United States. Now, however, the old saying, “To be rich as an Argentine,” has disappeared from the nation’s lexicon.
The country’s spectacular decline is, for many scholars, a source of intellectual debate. Answers to the million-dollar question of “what happened?” are often given as specific dates: 1929, when the Great Depression battered global trade and agricultural prices on which the Argentine economy was based; 1946, when Juan Perón was elected president, only to create a legacy of authoritarian populism; and 1976, when the military junta seized power, unleashing a reign of terror known as the Dirty War. Each is cited as a watershed moment — when history could have taken a different turn.
But this discourse of failure is hardly new. Throughout Argentina’s history, virtually every generation has deemed the country a failure. In the 1890s, modernizing elites declared the country too primitive and backward to succeed as “the Yankees of the South.” Rather than reform the nation from within, leaders looked to Europe for solutions to the country’s problems.
At the turn of the 20th century, the elites were fretting over the country’s unfulfilled promises after a tide of immigration — mostly peasants from impoverished Spain and southern Italy — generated new anxieties about national identity, social unrest and criminality.
In 1946, when Perón took office, promising nothing short of “a new Argentina,” Jorge Luís Borges, the country’s celebrated teller of elusive fables, pronounced Argentine state-building a failure. “The state is an inconceivable abstraction,” Borges wrote. “The Argentine is an individual, not a citizen.”
For Borges, the idea that the state contains the moral actions of its citizens, as the philosopher Hegel suggests, was a “sinister joke” in Argentina.
Years later, during the junta’s Dirty War against political and “moral” enemies, the generals insisted that only military rule would reverse the country’s pathological decline and elevate it to its rightful place in history.
What does it mean when every generation sees its nation as a failure? In Argentina, where there are famously more shrinks per capita than anywhere else, this question demands closer scrutiny.
Rafael di Tella, a Harvard economist from Argentina, makes the search for a usable past — a history that can help solve the problems of the present — seem an exercise in futility. “If a guy has been hit by 700,000 bullets,” he explained to The Economist, “it’s hard to work out which one of them killed him.”
The living corpse of Argentina needs a new narrative, one that dwells less in the past and more on today as a point of departure.
Stirrings of change are becoming evident. On Feb. 18, a silent march organized by lawyers to mark the one-month anniversary of Nisman’s death drew an estimated 400,000 people into the streets of cities across the country. In soggy Buenos Aires, signs of defiance flashed under a sea of umbrellas: “I am Nisman,” “Argentine justice stinks,” “You can’t suicide us all.”
Fernández’s supporters accused the protesters of judicial “coup-mongering” and “politicizing tragedy,” as if Nisman’s investigation, which has now implicated two heads of state and a number of government officials, bears no relation to the powers-that-be.
While few doubt, in Argentina or elsewhere, that the truth about Nisman will remain buried in a sham investigation, controversy over the case continues to escalate, with new developments breaking frequently.
At stake is more than solving the mystery of a slain Jewish prosecutor. Or even bringing long-awaited justice to the victims of the bombing of the Asociación Mutual Israelita Argentina, the country’s largest Jewish community center. Nisman has come to symbolize Argentina’s culture of impunity and the shaky ground on which its democracy stands.
Weeks after the bombing, my family and I visited the crime scene in Buenos Aires. On a crowded sidewalk, I stared through the slats of a makeshift fence, built around the crater that had once been the Jewish community center. I remember seeing a group of policemen, my eye caught by the white sleeves of their uniforms, as they loitered in a corner of the rubble, eating and smoking, talking and laughing.
They seemed unbothered by the open cemetery on which they stood. Twenty years later, after Nisman has been labeled a martyr for the truth, and with the country reeling under crisis yet again, Argentines are abandoning apathy and illusions of failed grandeur.
To set history on a new course, they must remember Nisman at the ballot box during this October’s presidential election.
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10. JUDGE MAKES RULING BUT ARGENTINA DEBT FIGHT RAGES ON (Reuters News)
By Davide Scigliuzzo
Tue, Mar 24 2015
NEW YORK, March 24 (IFR) – Citigroup may have narrowly avoided losing its operating license in Argentina, but bondholders are still between a rock and a hard place after the latest court ruling on Argentina’s debt.
The US bank won a victory of sorts last week in New York, where a US judge is overseeing the decade-long legal battle between the sovereign and a group of holdout creditors.
The judge gave Citi the green light to facilitate two debt payments even as the US bank works to pull out of its role as local custodian of the Argentine-law bonds in question.
Judge Thomas Griesa had previously blocked any such payments unless Argentina also paid holdout creditors who refused to accept previous debt restructurings on the bonds they own.
Citi’s choice had been: make the payments and fall afoul of US justice, or block the payments and risk losing the right to operate in Argentina.
While Griesa’s ruling gets the bank off the hook for now, other entities – not to mention the investors themselves – remain stuck in a story that never seems even close to ending.
“Unlike prior similar orders, this order expressly excludes other institutions in the chain of payment,” said one lawyer briefed on the matter.
“It seems that its purpose is more to get Citibank out of the middle than to facilitate payment to bondholders.”
MIDDLE OF NOWHERE
Intermediaries such as Euroclear and Clearstream, which would process any payments to international debt-holders, are still in theory bound by Griesa’s initial ruling.
So even if Citi were to process the payments – coupons come due on March 31 and June 30 – the intermediaries would run the risk of violating a US court order.
If the local holders of the bonds are paid and the international creditors are not, then the local-law bonds could also go into default.
“Local holders will probably get paid,” a lawyer familiar with the situation told IFR.
“As for the off-shore holders, the question becomes what will Euroclear and Clearstream do? This could really put pressure on them.”
Euroclea