MEDIA REACTION; ARGENTINE-VENEZUELAN TIES; GLOBAL FINANCIAL

UNCLAS BUENOS AIRES 001580 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 SUBJECT: MEDIA REACTION; ARGENTINE-VENEZUELAN TIES; GLOBAL FINANCIAL CRISIS' IMPACT ON ARGENTINA; 08/13/07 ¶1. SUMMARY STATEMENT Weekend international stories are related to the current status of Argentine-Venezuelan relationship following the scandal of the 800,000-dollar suitcase found at Jorge Newbery Airport; and the impact of the global financial crisis on Argentine economy and upcoming elections. ¶2. OPINION PIECES AND EDITORIALS - "The trap of impunity" Ricardo Kirschbaum, general editor of leading "Clarn," writes (08/12) "Speculation and poisoned versions about the suitcase scandal are aimed at finding out the destination of almost 800,000 dollars and who made the whole thing public. Imaginative sources have added new accounts that could be summed up in three categories. "First, the Venezuelan who brought the money is, reportedly, not a successful oil businessman but an intelligence agent who regularly traveled from Buenos Aires to Montevideo to bring funds for social and political organizations supported by Chvez both here and in Uruguay. "A second rumor is linked to international politics. According to this version, the USG, which monitors Chvez's moves, is reported to have warned (local authorities) about the flight and its cargo. This could be related to a ferocious dispute within Kirchnerism between those who already know that they will not remain in power if Cristina wins the presidency and those who will. There is something else - the dispute over the airports control. "The third and prevailing version is that a payment of favors was made to some government official. Whatever the truth is, there is another element adding mystery to the facts - the involvement of the Yabrn network. "All this is a political bomb that has just exploded in the face of the government, which has distanced itself and has bluntly fired one of the traveling government officials. What is obvious is that the procedure is not unusual and that frequent impunity must have ruined them." - "A scandal spurring US concern" Ana Baron, Washington-based correspondent for leading "Clarn," writes (08/11) "... The suitcase found in Jorge Newbery Airport had a huge impact on US newspapers. Why? "The Bush administration, Capitol Hill and investors have closely �0A;followed the relationship between Chvez and Kirchner and the suitcase does nothing but confirm how ambiguous and shadowy it is. "... The scandal does nothing but deteriorate the image of the Kirchner administration. While everyone so far took it for granted that Cristina would win the presidency, 'Los Angeles Times' reprinted the question by Fernando Gonzlez, from 'Clarn' - 'How many more blows can Cristina's lead in the opinion polls handle?' "The atmosphere does not favor the predictable image presented by Cristina to investors gathered in Buenos Aires during the Council of the Americas conference." - "The US believes the (suitcase) case will affect Cristina Kirchner" Hugo Alconada Mon, Washington-based correspondent for daily-of-record "La Nacisn," writes (08/12) "... With the passing of hours, (Guido Alejandro) Antonini (Wilson) becomes walking proof of the complex relationship between the Kirchner and Chavez administrations in the eyes of both Republicans and Democrats... "The prevailing view among the staff of US Assistant Secretary for Latin America Tom Shannon is that Kirchner approached Caracas as much as he could to obtain as much money as possible... "A Washington source told 'La Nacisn' that '(Argentina's) close rapprochement to Chvez can be negative for Argentine interests, and in fact it is.' Democratic candidates, including Hillary Clinton, Barack Obama and Bill Richardson, also agree on this point... "... Peter Hakim, head of the Inter-American Dialogue studies center, told 'La Nacisn' 'Even if Cristina Kirchner wanted it, she would not find it so easy to distance herself from Venezuela and get closer to the US, when she will have to combine both continuity (of her husband's administration) and change.' 'The US will not do much and it cannot do much in terms of its ties to Argentina, to this administration or the next one, and much less if Argentina decides to continue counting on Venezuela, something which irritates Washington.'" - "Markets also vote" An editorial in liberal, English-language "Buenos Aires Herald" reads (08/13) "Argentina has been in no way immune from the plunges hitting world financial markets in the latter end of last week, thus showing that countries reluctant to globalize even on favorable terms are condemned to globalize involuntarily. Even Argentina's immunity from the specific cause of this latest global financial crisis... thanks to Argentina's cash-down housing culture does not prevent havoc on a broader front because Argentina is hit anyway by a US slowdown, by the general contagion and by the retreat from emerging markets as investment funds massively play it safe with US Treasury bonds, etc. "The Nstor Kirchner administration should be deeply worried by a crisis of these dimensions with only 10 weekends lying between now and election day because it threatens the global underpinnings of Argentina's boom of the last four years... The crisis goes beyond stock market bears... "This crisis may be bad news for the election campaign but the latter should not be allowed to interfere with crisis management. Argentina should be increasing its fiscal surplus in this global climate, not squandering it on electioneering. Apart from the fiscal surplus, Argentina is not entirely defenseless against the crisis - Argentina is not directly vulnerable to the immediate cause of the crisis thanks to the solid basis of its housing market... while Central Bank reserves top 43 billion dollars. But too much obstinacy in the attitude that the elections are more important than the crisis and the exposure to turbulence could reach dimensions which would lose the elections." To see more Buenos Aires reporting, visit our classified website at: http://www.state.sqov.gov/p/wha/buenosaires WAYNE