MEDIA REACTION THE BUSH ADMINISTRATION US

UNCLAS BUENOS AIRES 000894

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 THE BUSH ADMINISTRATION US
PRESSURES ON IRAN AND BRAZIL IMF ON ARGENTINA THE
VISIT OF FEDERAL RESERVE OF DALLAS PRESIDENT RICHARD
FISHER TO BUENOS AIRES CUBA 04/20/06


1. SUMMARY STATEMENT

UNCLEARED BY AN AMERICAN OFFICER

UNCLASSIFIED

SIPDIS
PROG 04/20/06
PAO:RBANKS
PRESS:GVEGA
IO:MTEKACH
PAS

AMEMBASSY BUENOS AIRES
SECSTATE WASHDC, IMMEDIATE
INFO CDR USSOCOM MACDILL AFB FL//SCJ2//
USCOMSOLANT

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 THE BUSH ADMINISTRATION US
PRESSURES ON IRAN AND BRAZIL IMF ON ARGENTINA THE
VISIT OF DALLAS FEDERAL RESERVE PRESIDENT RICHARD
FISHER TO BUENOS AIRES CUBA 04/20/06;BUENOS AIRES


1. SUMMARY STATEMENT

Key international stories today include President
Bush's cabinet shuffle; the USG allegedly pressuring
Brazil to stop its enriched uranium experiments;
Argentine writer Tomas Eloy Martinez's opinion of the
USG; the IMF report, "World Economic Perspectives'"
Latin American section, and its mention of the status
of Argentine economy; and the visit of President of
the Dallas Federal Reserve, Richard Fisher, to
Argentina. Leading "Clarin" carries an editorial on
the increasing repression in Cuba.


2. OPINION PIECES AND KEY STORIES

- "Bush speeds up his Cabinet reshuffle"

Hugo Alconada Mon, Washington-based correspondent for
daily-of-record "La Nacion," writes (04/20) "Harassed
by the increasing erosion in his administration, US
President George W. Bush shuffled his Cabinet again
yesterday. His political strategist will change
position, his spokesperson resigned and there are
rumors about the US Treasury and Defense Secretaries.

"The most noteworthy change for now involves Karl
Rove..., who will maintain his position and direct
access to the Oval Office, but will be in charge of
the election strategy again... bearing in mind the
challenge posed by November legislative elections.

"For his part, (President) Bush's spokesperson, Scott
McClellan will leave the presidential team and return
to the private sector after three years of clashes
with the media about the war and occupation of Iraq,
and the controversy on the distorted intelligence
information that led to the invasion."

- "The US warns to increase pressure on Iran"

Daily-of-record "La Nacion" reports (04/20) "The US
reiterated that it has not dismissed a diplomatic way
out of the crisis triggered by Iran's nuclear plans...

"... However, US Under Secretary of State Nicholas
Burns warned that 'it is necessary to wield pressure
on Iran' to have it stop its enriched uranium
experiments, and that the six countries in charge of
the management of the crisis should 'come to an
agreement on the strategy to be followed by the UN
Security Council.

"In this way, Burns talked about the deep disagreement
among the five members of the UN Security Council plus
Germany. Disagreement distances the US, UK and France
(which favor different levels of sanctions) on the one



hand, from Russia and China (which, although do not
like Iran's nuclear development, do not agree to
discuss any kind of sanction),on the other hand."

- "The US pressures Brazil to stop enriching uranium"

Eleonora Gosman, Sao Paulo-based correspondent for
leading "Clarin," writes (04/20) "The USG is wielding
pressure on Brazil so that it stops enriching uranium.
The pressures are political- the US is attempting to
discourage the Third World from autonomous projects
that could fuel Iranian arguments about its rights to
plan autonomous peaceful nuclear development.

"In this international chess game, Brazil is not
planning to yield. Brazilian Foreign Minister Celso
Amorin was clear and blunt when he defended every
country's right to attempt its own nuclear
developments with peaceful purposes.

"Amorim publicly underscored that Iran has the same
right to proceed with its enriched uranium
experiments, although he emphasized that the Iranian
government should make an effort to 'dispel any doubt'
regarding its nuclear experiments."

- "Tomas Eloy Martinez: 'The atmosphere in the US is
asphyxiating"

Patricia Kolesnicov, columnist of leading "Clarin,"
interviews Argentine writer Tomas Eloy Martinez
(04/20) "... (Martinez) compared the current US
climate with that of Argentina during the military
dictatorship. He said that the US lives 'a time full
of lies and insults to common sense, a bellicose time,
almost like the final stage of our military
dictatorship, with the conflicts of the Beagle channel
or the Malvinas, and everything is aimed at
maintaining the prestige of a stumbling regime...' He
added 'The atmosphere in the US is asphyxiating.' He
said that most of the letters from foreign countries
are being open.' He also rejected 'the slavery in
which immigrants live.' For all those things, 'A
friend of mine was telling me a short time ago that he
was planning to immigrate to France. He is a novelist
called Paul Auster.'"

- "The IMF predicts greater growth for Argentina, but
it warns about inflation"

Ana Baron, Washington-based correspondent for leading
"Clarin," writes (04/20) "While the IMF's influence on
Argentina has been greatly reduced since the Argentine
Government decided to cancel its debt, the IMF warned
yesterday on the way competitiveness has eroded due to
inflation, and on how productive capacity will be
increasingly limited.

"In the section on Latin America of its report on
World Economic Prospects..., the IMF highlighted that
the mix of both phenomena will lead to a brake on
economic growth. However, its experts had to correct
their prediction for 2006 economic growth. They
increased it from 4.2% to 7.3%, but they expect growth
to diminish to 4% in 2007.

"This was not the only correction they made. The IMF
expected a 10% inflation level for 2006, while now it
forecasts 12.9%.

"The IMF acknowledged that 2005 fiscal policy
performance was better than expected and that the
increase in tax collection helped finance 'a
significant increase in government's expenditure.'

"On the eve of the arrival of Argentine Economy
Minister Felisa Miceli in Washington, the IMF again
reiterated the need to increase interest rates, budget
surplus and exchange rate flexibility. According to
its experts, all these elements could make for a
better strategy to fight inflation than the price
accord that is being implemented by the Government."

- "'Negative climate for investment'"



Leading "Clarin" reports (04/20) "US Treasury
Secretary John Snow will warn Economy Minister Felisa

SIPDIS
Miceli about US corporations' concern about
Argentina's negative investment climate.

"... According to one source, 'the concern involves US
companies filing lawsuits at the International Center
for the Settlement of Investment Disputes (ICSID)
charging Argentina with having infringed the bilateral
investment treaty, and companies that have been harmed
by price controls and by the ban on meat exports."

- "A request for policies to capture investment"

Martin Kanenguiser, economic columnist of daily-of-
record "La Nacion," writes in the paper's "Economy and
Business" supplement (04/20) "While the President of
the Federal Reserve of Dallas, Richard Fisher, is an
economist, he uses certain medical terms and has a
political discourse - in his opinion, the (Argentine)
Government has a difficult task ahead, which is to
allay fears of hyperinflation...

"During a press conference at the US Embassy...,
Fisher sustained that the cycle of low interest rates
is finished in the developed world, and, that,
therefore, countries like Argentina will have to
promote 'responsible' policies to maintain investment
and growth. A former USTR and former VP of the
Kissinger, McLarty & Associates study, the USG
official said that Mercosur 'will never work.'"

- "A Federal Reserve man advises to increase reserves
in (US) dollars"

Candelaria de la Sota, columnist of leading "Clarin,"
comments (04/20) "Richard Fisher, President and CEO of
the Federal Reserve of Dallas, said that countries
exporting commodities have to take this occasion and
consolidate their economies by accumulating reserves
because high (commodity) prices will not last for
ever'...

"Fisher told journalists at a press encounter that
'for an American it is a pleasure to be in a country
with a fiscal and commercial surplus, and that grows
almost at the rhythm of China.' And he emphasized that
'Argentina is growing in an impressive way.'

"... Fisher recommended that emerging countries 'start
strengthening their economies and build reserves.' And
he added 'My impression is that your president knows
this very well.'"

- "Fisher praised twin surpluses"

Mara Laudonia, columnist of business-financial
"InfoBae," comments (04/20) "According to Richard
Fisher, President and CEO of the Federal Reserve of
Dallas, generally speaking, the price accord policy
aimed at containing inflationary expectations 'is not
the ideal one' for countries, although its final
outcome in Argentina 'still remains to be seen.'

"... During a press conference at the US Embassy,
Fisher underscored that 'The Argentine government has
a difficult task ahead - restoring confidence in the
system and putting an end to old fears of inflation.
They (the government) chose certain ways to tackle
this problem and I wish them good luck.'"

- "'Argentina should be cautious not to scare
investment away'"

Business-financial "Ambito Financiero" reports (04/20)
"The issue most highlighted by the President and CEO
of the Federal Reserve Bank of Dallas, Richard Fisher,
was the need for Argentina to bring inflation under
control.

"Before giving a seminar at the Central Bank, the USG
official asserted at the US Embassy that price accords
have not been an ideal prescription for taming
inflation in some countries, although he said that
Argentina is working on expectations and 'the



effectiveness of this tool remains to be seen.'

"Fisher warned that vis--vis the increasing interest
rates in the US and other low-risk nations, the
governments of emerging countries will face greater
competition to capture investment, and he also
emphasized the importance of the strategy of
accumulating reserves."

- "'You have to strengthen reserves, commodity prices
will not last for ever'"

Florencia Donovan, columnist of business-financial "El
Cronista," writes (04/20) "During a visit to
Argentina, the President and CEO of the Federal
Reserve Bank of Dallas, Richard Fisher, avoided giving
too many details on which the next steps of the
Federal Reserve Open Market Committee... will be.

"However, he warned that 'it will not be so easy to
move on' for emerging countries because they will have
to get ready to compete in an international scenario
with increasing interest rates in the US, Europe and
Japan, three countries that will compete for global
liquidity by offering better credit quality than most
developing countries.

"During a press encounter at the US Embassy..., Fisher
took the occasion to underscore the need for emerging
countries (among them, Argentina) to show sound fiscal
and monetary policies, tame inflation, and have
'enforceable' legislation and political conditions
that will not only capture capital investment but
'also make investors keep their money in the
country.'"

- "A policy allowing for growth without inflation is
attainable"

Paula Boente, columnist of business-financial, center-
right "InfoBae," writes (04/20) "Speaking to a huge
audience..., Richard Fisher talked about the effects
of globalization and its impact on monetary policies.

"According to Fisher, 'If productivity growth can be
maintained at the current level of 3% per year,
monetary policy could well accompany said growth
without any fear of unleashing inflationary
pressures.'

"Fisher explained that the increase in productivity in
other countries can contribute to lowering costs of
both consumer goods and imported goods in the domestic
market, thereby contributing to keeping the inflation
rate low."


3. EDITORIALS

- "Increasing repression in Cuba"

Leading "Clarin" editorializes (04/20) "The Cuban
government's decision to punish seven mothers who
attempted to escape the island is a new sign of
political repression.

"... This tendency has sparked strong clashes between
Cuba and its traditional European allies, but it has
had less impact on Latin America, where criticism of
the Cuban political regime is considered a statement
of support for the US and its aggressive policy on
Cuba.

"Cases like this should support the observation that
democracy and respect for human rights (which are
values appreciated in Latin America) should also be
promoted in Cuba."

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

GUTIERREZ