KIRCHNER'S ASSOCIATES ATTACK FORMER ECON MINISTER

C O N F I D E N T I A L BUENOS AIRES 001243

SIPDIS

SIPDIS

STATE FOR WHA/BSC, WHA/EPSC, AND INR/R,
SOUTHCOM FOR POLAD

E.O. 12958: DECL: 03/17/2015
TAGS: PGOV PREL PHUM SNAR AR
SUBJECT: KIRCHNER'S ASSOCIATES ATTACK FORMER ECON MINISTER


Classified By: Ambassador Line Gutierrez for Reasons 1.4 (B)(D).


1. (U) Other Mission reporting available at
http://www.state.sgov.gov/p/wha/buenosaires


2. (SBU) Summary: Following a number of recent public
appearances and statements by former Minister of Economy
Roberto Lavagna, many government officials close to President
Kirchner have come out strongly criticizing Lavagna in an
apparent effort to discredit him. While Lavagna has declared
that he will not make clear his plans for the 2007 elections
until next year, he is widely seen as a likely rallying point
for opposition to Kirchner. The only clear fact in Lavagna's
recent criticism of the government and the strong response by
Kirchner's allies is an end to speculation about Lavagna
joining Kirchner's electoral slate for the 2007 elections.
End Summary.


3. (SBU) Lavagna was appointed as the Minister of Economy by
caretaker president Edwardo Duhalde in 2002 and continued in
that position for the first two-and-a-half years of the
Kirchner administration. Lavagna was the only cabinet
official not to openly support Kirchner or his slate of
candidates in the 2005 elections and resigned shortly after
the elections concluded. He was the last non-Kirchnerite in
the government, with the exception of the Vice President, and
was widely seen as the last minister with any degree of
independence. When he left office, he was by far the most
popular figure in the government after President and Mrs.
Kirchner, in large part due to a belief that he deserved a
great deal of the credit for steering the Argentine economy
out of the worst economic meltdown in the country's history.


4. (SBU) Immediately after Lavagna left office, rumors and
speculation regarding his political future began. He has
been courted by all major opposition groups and leaders as a
possible opposition presidential candidate in 2007, while
pundits have often named him as a possible Buenos Aires
Mayoral candidate for Kirchner. Until recently, Lavagna had
been carefully silent and had refrained from comment on the
state of the Argentine economy, leaving a great deal of
speculation about whether he intended to rejoin Kirchner,
join the opposition, or simply retire from public life. Over
the last couple of weeks, Lavagna ended his silence with a
series of interviews in which he questioned his successor's
handling of the economy. He particularly criticized the
government's ban on beef exports, strong-arming of the
agriculture sector, price control policy and relations with
Venezuela.


5. (SBU) Kirchner himself has not publicly reacted to
Lavagna's criticism but it is widely reported that the recent
barrage of attacks on Lavagna by key Kirchner supporters is
being coordinated by the Casa Rosada. Kirchner supporters
are quick to downplay Lavagna's role in the economic recovery
and blame him for both his failure to control inflation and
his successor's conflicts with the agriculture sector. Some
opposition leaders who often can agree on nothing have
rallied publicly to Lavagna's defense and have increased
calls for him to run for president in 2007. Lavagna, like
Kirchner, has publicly stated that he will not make any
announcement regarding a possible presidential run until next
year, but his recent comments could well be a preliminary
"testing of the waters" on his part. (Comment: Even though
the local papers daily report both rumor and theory regarding
the 2007 elections, it is still far to soon to make any
definite predictions about the 2007 elections. The one clear
conclusion that can be drawn from the recent fireworks is
that Lavagna has apparently chosen not to leave open the
option of rejoining Kirchner's political machine. End
Comment.)

6. (SBU) Lavagna's public break with President Kirchner
makes him an even more attractive candidate for the fractured
opposition. Radical Civic Union (UCR) heavyweight, former
President Raul Alfonsin, has been heavily courting Lavagna as
a 2007 presidential candidate as a means to save the
long-declining, century-old UCR party. Alfonsin's public
backing of Lavagna in the face of the criticism of Krichner's
allies is a clear negative response to Kirchner's call of a
Chilean-style "concertacion" alliance between the UCR and
Kirchner's Victory Front (FPV). Lavagna has also been
receiving support from the ex-Duhaldista camp and from allies
of Republican Proposal's (PRO) Mauricio Macri, although Macri
himself has not shown as much enthusiasm, labeling Lavagna as
a "pro-government candidate.


7. (C) Comment: Any potential opposition candidate will have
a difficult time competing with the popular President
Kirchner in 2007 -- assuming President Kirchner does in fact
seek reelection as most analysts expect -- but polls show
that Lavagna is viewed favorably by a majority of Argentines
who feel that Lavagna deserves a good portion of the credit
for Argentina's strong economic recovery. Given his long
history in Kirchner's government and even longer history as a
statist economic official (his first public position was in
the office of Price Controls under Alfonsin),it will be
difficult for him to build a potential presidential campaign
based only on attacking Kirchner's economic policies,
particularly if the economy continues to grow. If Lavagna
does aspire to run against Kirchner in 2007, he will have to
develop a broader alternative message in order to gain ground
against a president that polls show would easily win a first
round victory if presidential elections were held today. End
Comment.


GUTIERREZ