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Argentina: Growing fear of default

thiagoaragao — Wed, 20 Aug 2008 18:54:31 +0000

With a high debt and no access to international credit, Argentina is yet again experiencing the default shadow, according to information released by foreign banks last week through the local press. “Markets are beginning to ask themselves if the country is on the brink of yet another default”, as stated by a Lehman Brothers circular, under the title of “Argentinean Roller Coaster”. In its last report, Morgan Stanley stated that the country’s high public expenditure annuls increases in income (Folha).

Argentina: Cristina Kirchner disapproved by majority

thiagoaragao — Thu, 14 Aug 2008 11:40:52 +0000

57% of Argentines disapprove of Cristina Kirchner’s term in the presidential office. The figure comes from a poll conducted by consultancy firm MBC-Mori and published by newspaper Perfil. In turn, 28% approve of her government. The president has seen her image stained because a row with farmers over a controversial tax bill.

Also, half the interviewees consider the country’s economic situation “bad” or “very bad”. Just 21% believe it is “good” or “very good”. In addition, 61% reject the government’s policy to tackle inflation rates, whereas 12% approve of them. The credibility of the National Institute of Statistics and Censuses (INDEC) has been under suspicion because of an alleged manipulation of inflation rates due to pressure from Casa Rosada staff.

However, Argentines have favourable expectations when it comes to the performance of the new chief of staff, Sergio Massa. According to a poll by consultancy firm Ibarómetro, published by newspaper Perfil, 53.8% of them are optimistic, whereas 35% have a negative opinion.

A different poll conducted by Universidad Abierta Interamericana has also shown poor results for former president Néstor Kirchner. 79.2% of the interviewees said that he should move away from President Cristina. Only 12.1% affirmed that he should accompany her in her term.

Argentina – January 2008

thiagoaragao — Fri, 18 Jul 2008 22:49:02 +0000

An unprecedented phenomenon is occurring in Argentina. In her first weeks in office, president Cristina Kirchner has retained 75% of the civil servants who worked under former president Néstor Kirchner. Political analysts tend to explain that the October election did not result in a new government, but rather in a re-election with a different president. Besides, it is believed that Kirchnerism wants to stay in power for longer. Among the alternatives, Néstor could be a candidate in 2011, and Cristina in 2015. Or Cristina would stand for re-election in 2011 and Néstor would wait until 2015. Analysts also qualify Cristina’s government as a “two-headed presidency,” for, even having left the Casa Rosada, Néstor continues participating actively in the current government’s political decisions.

The Argentinean government believes it is shielded against the crisis threatening the US economy. This is because the Central Bank’s record $47 million reserves, the five consecutive years of economic growth and fiscal and trade surpluses will protect the nation. Besides, it is understood that the country has become accustomed to living without external financing as a result of the debt default, and thus is less exposed to external crises. For all the optimism, economic analysts speak with caution.