ARGENTINA: KIRCHNER STRATEGIST ON ELECTIONS AND

C O N F I D E N T I A L SECTION 01 OF 02 BUENOS AIRES 001804

SIPDIS

SIPDIS

STATE FOR WHA TOM SHANNON, JOHN MAISTO, AND CHARLES SHAPIRO
NSC FOR DAN FISK
TREASURY FOR DAS NANCY LEE
USCINCSO FOR POLAD

E.O. 12958: DECL: 08/10/2016
TAGS: PGOV PHUM PREL AR
SUBJECT: ARGENTINA: KIRCHNER STRATEGIST ON ELECTIONS AND
GOA POLICY


Classified By: CDA, a.i., Michael Matera, Reasons 1.4(b) and (d)


1. (C) SUMMARY: On August 9, the Charge and Poloff
(notetaker) paid a courtesy call on Juan Carlos Mazzon,
President Kirchner's primary political campaign strategist,
that included a discussion on the 2007 elections and GOA
policy. The Charge noted Argentina's impressive economic
recovery in the last three years, but expressed some concern
over the GOA's price control policies and their impact on
investment. Turning to domestic politics, Mazzon expressed
confidence that President Kirchner would run for reelection
next year, but regardless, he said First Lady and Senator
Cristina Kirchner would definitely not be a presidential
candidate. Mazzon said he thought former Economy Minister
Roberto Lavagna's potential presidential candidacy was
positive because it instigated a new debate over ideas and
provided a means for the Radical Civic Union (UCR) to survive
as a party. Charge took the opportunity to deny press
reports that Lavagna was the U.S. candidate. Turning to
international issues, Charge said that the General
Preferences System (GPS) review announced earlier in the week
was a technical process required by our Congress and was not
designed as a punishment for Argentina or the other 12
countries included in the review. Mazzon closed by saying
that the GOA looked forward to working with incoming
Ambassador Wayne. END SUMMARY.


2. (SBU) On August 9, the Charge and Poloff (notetaker) paid
a courtesy call on Juan Carlos Mazzon, President Kirchner's
primary political campaign strategist that included a
discussion on the 2007 elections and GOA policy. Mazzon
welcomed the Charge back to Argentina.


3. (C) The Charge noted Argentina's impressive economic
recovery in the last three years, but expressed concern over
the GOA's price control policies and their impact on
investment. The Charge drew an analogy between the
inflexibility of the current GOA attempts at price controls
to Argentina's decade-long adherence to convertibility in the
1990s, arguing that market forces cannot be held in check for
extended periods without serious risks. Mazzon said that the
price controls were designed as a short-term measure. He
blamed part of the inflation problem on the business
community taking excess profits, requiring price controls.
The Charge noted the importance of attracting foreign
investment leading to greater supply as a better long-term
solution to the inflation problem. Mazzon said the GOA
wanted to avoid a vicious cycle in which government policies
against inflation lowered investment, thereby causing more
inflation. Mazzon said the GOA also has a major role to play
in investment, with the increased government reserves
allowing the GOA to make badly needed investments in energy,
transportation and infrastructure.


4. (C) Turning to domestic politics, Mazzon expressed
confidence that President Kirchner would run for reelection
next year, but regardless, he said First Lady and Senator
Cristina Kirchner would definitely not be a presidential
candidate. If President Kirchner decided not to run, he said
that the Casa Rosada would find another candidate to run for
president, instead of Cristina Kirchner. Mazzon felt that
"other figures" within the ruling party would try to secure
the presidential nomination if President Kirchner decided not
to run, a fact that Mazzon thought would push President
Kirchner to run in the end, even if he does not want to do so.


5. (C) Mazzon said he thought former Economy Minister
Roberto Lavagna's potential presidential candidacy was
positive because it instigated a new debate over ideas and
provided a means for the Radical Civic Union (UCR) to survive
as a party. Charge took the opportunity to correct press
reports that Lavagna was the U.S. candidate, noting that the
U.S. would take no sides in the 2007 election and would work
with any president that the Argentine people democratically
choose. Mazzon said that he never believed the reports about
the U.S.-Lavagna connection and said that the Argentine press
created the story based on the fact that Lavagna traveled to

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the U.S. before initiating his pre-candidacy. "When there
are no headlines in Argentina, we invent them." Charge noted
the irony that the UCR was seeking to save itself by
supporting one of two Peronist candidates, either President
Kirchner or Lavagna. (Note: The UCR is currently divided
between those that want to align with Kirchner and those that
want the party to support an opposition candidate,
principally Roberto Lavagna. End Note.)


6. (C) Mazzon was optimistic about the Casa Rosada's chances
in next year's elections, highlighting their use of allies
from across party lines. Mazzon said there would be three
main branches of Kirchner forces for the electoral campaign
-- Kirchner's Victory Front (FPV),the Peronist Party (PJ),
and Kirchner's "concertacion" that would include Kirchner's
UCR allies. In a few districts, Mazzon noted that the
branches would likely compete against each other, such as in
Rio Negro, where a UCR Governor aligned with Kirchner will
compete against a PJ candidate for Governor who is also a
close ally of Kirchner. Mazzon said the Capital would be a
key Kirchner focus in the 2007 elections, with Vice President
Scioli being the likely candidate. Mazzon said he thought
Republican Proposal (PRO) leader Mauricio Macri would compete
for Mayor of Buenos Aires and would be a difficult candidate
for the government to beat.


7. (C) Turning to international issues, Charge said that the
General Preferences System (GPS) review was a technical
process required by U.S. legislation and was not designed in
any way as a punishment of Argentina. Charge noted that many
other countries, including close U.S. allies, were also
undergoing the same review. Charge emphasized that the U.S.
is looking for the GOA's input into the GPS review process.
The Charge noted that while the USG and GOA may not agree on
all issues, the U.S. and Argentina have successfully
maintained an open and honest dialogue. Mazzon said that the
GOA also wanted a good dialogue with the USG and said he
thought the initial press reporting of the issue was not
helpful.


8. (C) Charge and Mazzon closed with a discussion of
incoming Ambassador Wayne. Charge highlighted Ambassador
Wayne's strong credentials on economics, as well as his broad
political expertise. Mazzon said the GOA looked forward to
working with the new Ambassador, and Mazzon complimented the
"prudence" with which Ambassador Gutierrez had conducted
himself during his three years in Buenos Aires.


9. (C) COMMENT: This was a good first meeting between the
Charge and Juan Carlos Mazzon and proved to be a good
opportunity for the Charge to clarify some misconceptions
about U.S. policy that have been circulating in the Argentine
press. Mazzon's comments about Cristina Kirchner not being a
presidential candidate next year under any circumstances lend
credence to press reporting that the Cristina candidacy has
been discarded for the time being. It also may reveal the
strong divisions the talk about her potential presidential
run generated among the Casa Rosada staff, with Mazzon
falling into the "anti-Cristina candidacy" camp. Juan Carlos
Mazzon will continue to be a valuable Embassy contact as we
head into next year's election campaign, where Mazzon will
play a pivotal role in developing Kirchner's electoral
strategy. END COMMENT.


MATERA