MEDIA REACTION NEW US TREASURY SECRETARY IRAQ

UNCLAS BUENOS AIRES 001216

SIPDIS

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 MEDIA REACTION
SUBJECT: MEDIA REACTION NEW US TREASURY SECRETARY IRAQ
LATIN AMERICA IMF DELEGATION TO ARGENTINA POPULISM IN
LATIN AMERICA COLOMBIA BOLIVIA 05/31/06



1. SUMMARY STATEMENT

Today's local papers report on the appointment of
Henry Paulson as the new US Treasury Secretary in
replacement of John Snow; the mobilization of some US
troops from Kuwait to Southern Iraq; Argentina and
Brazil's efforts to obtain greater integration among
Latin American countries; an IMF delegation asking
Argentine legislators to approve legislation to fight
terrorist financing; the implications of Colombian
President Uribe's re-election; and the imminent
Bolivian agricultural reform.


2. OPINION PIECES AND KEY STORIES

- "Another Bush's (Cabinet) change: a banker will be
the US Secretary of Treasury"

Ana Baron, Washington-based correspondent for leading
"Clarin," writes (05/31) "The replacement of John Snow
at the US Treasury Department by one of Wall Street's
'biggies,' Henry 'Hank' Paulson (60),the head of
Goldman Sachs, will not involve big changes in (US
President) George W. Bush's economic policy. However,
it could well contribute some changes to the (US)
policy toward Argentina.

"... US President Bush thanked Snow for his work and
praised Paulson for his knowledge of financial
markets...

"... Bush said that Paulson will have to 'maintain the
pro-economic growth policy with low taxes and pressure
the Congress to cut its expenditures.' If someone
expected the appointment of a new (US) Treasury
Secretary to involve some sort of reversion in tax

SIPDIS
cuts allowing for a better tackle of the increasing
fiscal deficit, he is wrong.

"Reportedly, with Paulson's appointment, Bush will
attempt to strengthen the value of the US dollar.

"According to a Wall Street source, Paulson does not
agree with the 'moral hazard' theories promoted by
some economic advisors of Bush. This is why, one
should not dismiss the possibility that he will adopt
a less neutral stance regarding Argentina's creditors
who were left out of the debt swap (holdout
creditors)."

- "The US transfers troops from Kuwait to stop
violence in Iraq"

Daily-of-record "La Nacion" reports (05/31) "The US
Pentagon sent 1,500 additional troops to Iraq in order
to reestablish order in the Western province of Al-
Anbar now that fears of a civil war are increasing in
the Southern section of the country.

"According to Bryan Whitman, spokesperson of the US
Pentagon, the escalation of violence in Al-Anbar,
which is dominated by Sunnis, made the US mobilize two
additional battalions from Kuwait.

"The US decision seems to distance further the
prospects of an important reduction in the number of
US troops stationed in Iraq..."

- "Argentina and Brazil include Chile in their attempt
to put order in the region"

Business-financial "El Cronista" (05/31) "Argentina,
Brazil and Chile seek to make up an 'ordering axis' of
Latin America's complex political reality vis--vis
Washington and Europe's fears vis--vis the resurge of
nationalistic movements under the umbrella of
Venezuelan Hugo Chavez.

"Presidents Nestor Kirchner, from Argentina, and Lula,
from Brazil, promoted the first political coordination
move, following the Bolivian President Evo Morales'
decision to nationalize hydrocarbons.

"... The first meeting among Foreign Ministries
Taiana, Foxley and Amorim will be in a neutral place -
it will be on June 4 at the OAS' General Assembly in


Dominican Republic, which, among other activities,
will develop a forum on 'the democratic stability of
the Americas.'"

- "IMF asks (Argentina) to approve legislation to
fight terrorist financing"



Conservative "La Prensa" reports (05/31) "An IMF
delegation has again asked the members of the
Argentine Senate's Narco-trafficking and Homeland
Security to pass legislation labeling terrorism as a
crime.

"As a matter of fact, the group of experts has
submitted an initiative to label terrorism as a crime
and impose penalties for terrorist financing, but it
is still being analyzed by the combined committee made
up by the Argentine Central Bank, the Ministry of
Justice and legislators of both chambers."

- "A weird alliance"

Daily-of-record "La Nacion" reprints an opinion piece
written by Guy Sorman, who writes (05/31) "I am in Sao
Paulo. An audience made up of businessmen and
academics is listening, bewildered, to my explanation
that it is advisable for Brazil and the entire Latin
America to have a leftist government that will not
implement its program (like that of Lula) rather than
return to a conservative and pseudo-liberal right
wing. I tell them that they should not get the enemy
wrong - the real danger is not the Lula- or Bachelet-
styled left wing, but populism. Chavez, in Venezuela,
and Morales, in Bolivia, are actually dangerous. They
are not right- or left- wingers but populist leaders.

"... I have come to the conclusion that the 'crisis of
liberalism' in Latin America, of which the European
and Latin American media speak of, does not really
exist. As a matter of fat, liberalism has become
centrist - it is a common program shared by right- and
left-wing democratic political parties.

"They should reflect and work together before the
populism of Chavez, Morales and Castro gets hold of
the most impoverished sectors of this hemisphere,
which are also the most numerous."


3. EDITORIALS

- "Uribe's re-election in Colombia"

An editorial in leading "Clarin" reads (05/31) "For
the first time in its history, Colombia will have a
democratically elected president for two terms in a
row, which could be due to three fundamental reasons -
the demand for a (strong) government, the crisis of
the traditional political system, and the leadership
demonstrated by the re-elected president during the
last four years.

"... In this way, Colombia adds itself to the trend
that has been established in most Latin American
countries during recent years. Uribe's landslide
victory seems to confirm a preference for a
presidential system, particularly in times of serious
crises and threats."

- "Bolivia's agricultural reform"

Daily-of-record "La Nacion" editorializes (05/31) "The
Bolivian government has announced that it will carry
out an agricultural reform based on the confiscation
of the largest rural companies and their assignment,
in smaller lots, to peasants. It is a follow-up of
President Evo Morales' nationalization of
hydrocarbons...

"... Both in benefit of Bolivia and foreign investors,
we expect that the Bolivian reform will downplay its
initial political impetus and conceive a gradual
process. It should be aimed at transforming actually
sterile plots of land through deals reached with their
owners that will honor both judicial security and the


rule of law..."

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

GUTIERREZ