CONVERSATION WITH CASA ROSADA INSIDER OSCAR

C O N F I D E N T I A L BUENOS AIRES 000350

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/10/2016
TAGS: PGOV PREL AR
SUBJECT: CONVERSATION WITH CASA ROSADA INSIDER OSCAR
PARRILLI

REF: A. 05 BUENOS AIRES 141


B. BUENOS AIRES 97

C. BUENOS AIRES 291


D. BUENOS AIRES 346



Classified By: Ambassador Lino Gutierrez for Reasons

1.4 (b) and (d).




1. (C) Summary: In a wide-ranging conversation with DCM,

Secretary General of the Presidency Oscar Parrilli said GoA



SIPDIS

efforts to control prices were working and that the 2006

inflation rate would be lower than generally expected. He

defended the government's approach to controlling the

piquetero movement and demonstrations, claiming recent

violence during a labor dispute in Santa Cruz province

(during which a policeman was killed) would have been much

worse had the police force been armed. Regarding the 2007

presidential elections, Parrilli said President Nestor

Kirchner would not announce his decision on whether to seek

reelection until the end of this year but speculated he would

run and that his main competitor would be Neuquen governor

Jorge Sobisch. End Comment.




2. (C) The DCM and PolCouns met on February 9 with Oscar

Parrilli, the Secretary General of the Presidency and one of

a small group of advisors considered to be in President

Kirchner's inner circle. (See Reftel A for biographic

details on Parrilli and other inner circle members.) To open

the discussion, the DCM noted recent developments in

U.S.-Argentine relations including the January 12 meeting of

Assistant Secretary Tom Shannon with Kirchner (Reftel B),the

visit of Deputy Assistant Secretary of Defense Rogelio

Pardo-Maurer (Reftel C) and emphasized the importance of

continued assistance and cooperation on regional issues such

as Haiti and Bolivia and multilateral issues such as the

recent IAEA Board of Governors meeting in which Argentina

supported the reporting of Iran to the UN Security Council.

Regarding potential issues of concern, the DCM noted the

continued destabilizing activities of Venezuelan president

Hugo Chavez, the rising inflation rate in Argentina and labor

violence in Kirchner's home province of Santa Cruz (Reftel D).




3. (C) Responding first to the issue of inflation, Parrilli

said the recent round of price control agreements with retail

and industry sectors had been successful and that the rate of

inflation in February would be significantly lower than in

January (when it reached 1.3 percent). He opined the

government could keep the inflation rate during the remainder

of 2006 to under ten percent. The DCM noted that while price

controls could provide short-term relief to inflationary

trends, ultimately, appropriate monetary and fiscal policies

were the only long-term solutions for controlling inflation.

Parrilli said the GoA was committed to maintaining high

reserves and a competitive exchange rate while at the same

time making the necessary infrastructure investments to

continue economic and social development.




4. (C) On the question of Chavez, Parrilli said Argentina

had economic ties with Venezuela that could not be

discounted. He noted in particular Venezuela's purchase of

Argentine bonds. When pressed by the DCM on Chavez's

undermining of democratic institutions in Venezuela, Parrilli

only responded that the GoA's economic ties with Venezuela

did not mean support for Chavez's heavy-handed ways.




5. (C) Turning to the violent labor dispute in Santa Cruz

province that left one policeman dead, Parrilli defended

government tactics in dealing with demonstrations and

piquetero groups. He said the government's decision to use

only minimal force in dealing with protesters was the correct

one, even in the current situation. Had the police responded

in kind to the strikers in Santa Cruz, there would have been

thirty dead instead of just one, he said. More generally,

Parrilli said the government's strategy to isolate and/or

coopt piquetero groups had been successful and that the

number of protesters who now show up for demonstrations has

declined significantly in the last three years. What

remained, he said, was a group of hard left, professional

agitators who refused to enter into any sort of dialogue.




6. (C) When asked for his perspective on domestic politics,

Parrilli said Kirchner would not make any announcements

regarding his electoral intentions for 2007 until the end of

this year. Speaking on a personal basis, Parrilli said it

would clearly be easier to move forward with the

administration's long-term goals for Argentina if Kirchner

remained as president for a second term. Asked who his



likely competitor might be, Parrilli said Governor Sobisch of

Neuquen Province would be the chief rival but added he would

not provide stiff competition for Kirchner. He opined that

Buenos Aires city national deputy Mauricio Macri would opt

for the Buenos Aires city chief of government race.




7. (C) Comment: Parrilli's role in the inner circle is

primarily that of Kirchner's gatekeeper. While not a policy

advisor himself, his views certainly reflect Kirchner's

thinking on pivotal issues such as the economy. What was

most striking about Parrilli's comments was their reflection

of old-school, classic Peronist thinking, in particular in

their faith in government intervention and price controls in

the economy. Also notable (and consistent with classic

Peronism) was Parrilli's rejection of the hard left in

Argentine politics, which could presage a more firm

government response in the future to violent demonstrations.

End Comment.




8. (U) Reftels available at

http://www.state.sgov.gov/p/wha/buenosaires.< /a>

GUTIERREZ


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