(C) KIRCHNER STATE OF THE UNION ADDRESS: A

C O N F I D E N T I A L BUENOS AIRES 000413 SIPDIS SIPDIS WHA FOR WHA/BSC AND WHA/EPSC E FOR THOMAS PIERCE, PASS NSC FOR JOSE CARDENAS PASS FED BOARD OF GOVERNORS FOR PATRICE ROBITAILLE EX-IM BANK FOR MICHELE WILKINS OPIC FOR GEORGE SCHULTZ AND RUTH ANN NICASTRI PASS USTR FOR SUE CRONIN AND MARY SULLIVAN TREASURY FOR ROSELLEN ALBANO USDOC FOR ALEXANDER PEACHER AND JOHN ANDERSEN USCINCSO FOR POLAD PARIS PASS TO OECD E.O. 12958: DECL: 03/01/2017 TAGS: PGOV PREL ECON AR SUBJECT: (C) KIRCHNER STATE OF THE UNION ADDRESS: A PUGNACIOUS CAMPAIGN LAUNCH Classified By: DCM MICHAEL MATERA, REASONS 1.5 (B,D) ¶1. (C) SUMMARY: In what amounts to an annual state of the union address, President Kirchner opened the GOA Congress's 2007 session on March 1 with a two hour, 15-minute speech, touting his administration's economic achievements, its "regained" political independence, and taking shots at the usual suspects - the IMF, economic naysayers, the press, the opposition and Uruguay. The United States was not mentioned by name, but implied in a veiled reference to those who "would question Argentina's growing closeness" to Venezuela. A planned mass rally of 30,000 Kirchner supporters was largely washed out by massive rains. Despite the usual fiery rhetoric, the speech was largely and perhaps predictably a re-packaging of attack lines Kirchner has used on many previous occasions, with the added theater of the opening of Congress. In fact, there was little, if any, new material at all in the remarks, and many commentators and opposition figures characterized it as a campaign speech rather than state of the union. In fact, the speech appeared designed to launch the long march toward October presidential elections. The purported visit of Venezuelan President Chavez is, in this sense, probably the next big campaign event designed to show that he is bringing economic benefits home and doing it his way. END SUMMARY. ¶2. (SBU) OPENING OF CONGRESS SETS OUT ACHIEVEMENTS AND AGENDA. Amidst heavy rains, this annual and formal ritual was attended by the full cabinet, many state governors, diplomats (including Ambassador Wayne),and many other VIPs. The speech was widely covered, and on live television, amidst some speculation that this could be Kirchner,s last such annual address to Congress: while Kirchner is still widely expected to run for reelection in October, both he and his close advisors continue to suggest publicly that his wife Senator Cristina Kirchner is being considered as a candidate. Kirchner,s speech did nothing to clear up who will be the Kirchner candidate in October. The audience broke out in applause about a dozen times, mostly over the usual references to Argentina overcoming its past years of economic and political crises and "escape from hell," the "restoration" of its sovereignty and "dignity," and that "we have overcome our worst moments." ¶3. (U) A LAUNDRY LIST OF ECONOMIC ACHIEVEMENTS. Kirchner devoted a large part of his very long speech to touting his administration's achievements, lauding improvements in unemployment, poverty, growth, budget and current account surpluses, country risk, reserve accumulation, and the state retirement system. Argentina "regaining sovereignty" had permitted such recovery and improvement in its socio-economic situation. ¶4. (SBU) DEFENDS HIS ACTIONS AND EGGS ON HIS DETRACTORS; ATTACKS THE USUAL SUSPECTS - IMF, NAYSAYERS, OUTSIDERS. Kirchner said many times that his leadership was an "Argentine model" for growth and inclusiveness. He did not miss an opportunity to ridicule those who he said have long predicted an energy crisis, and that his administration is properly responding to the great increase in energy demand. He also defended his administration's strategy of renegotiating public utility contracts and maintaining below-market public utility tariffs, saying that he would not "give in" to outside interests. He also questioned the press and opposition, challenging the opposition to produce solutions. Kirchner repeated his usual barbs against the IMF, several times referring to the "IMF dictatorship," trumpeting his December 2005 decision to pay off the remaining USD 10.2 billion in IMF debt, and praising himself for dispatching that "burden." Kirchner said that the naysayers were wrong, as reserves have doubled from the time the debt was paid off. He said that "with all due respect to the intellectual capacity of the IMF, we have our own sensibilities and ability to administer our country to bring about a very different and better situation." Kirchner said that the IMF had brought poverty and exclusion to Argentina, and that he had begun to reverse that. In a further rejection of any possible IMF program as part of a deal to pay off GOA's Paris Club debt (which he said he still wanted, nonetheless),Kirchner used rude street language, saying basically "shove it" to any such IMF agreement, and "under no situation or circumstance are we open to an IMF agreement," a point also met with loud applause. (Comment: Local media perhaps made this reference appear more even more provocative than it actually was, notwithstanding his rude language. He did preface this remark about a rejection of an IMF deal with a clear statement that "we want to pay our debt (to the Paris Club). End comment.) He also repeatedly lashed out at the domestic opposition by deriding policies of the nineties. ¶5. (U) HUMAN RIGHTS. Kirchner spent several minutes reviewing his human rights policies, using the opportunity to mention the disappearance of Dirty War witness Jorge Julio Lopez. He also said that those who postulated that the kidnapping and alleged torture of Dirty War witness Luis Gerez was a political maneuver are trying to smear the President. He pledged to continue fighting for human rights, saying "I am not afraid. I know what we are facing, but as President of the Republic, I must be out front in the battle for justice, truth, and later, the loss of fear." He also urged judges to accelerate hearing of long-pending human rights cases, and also offered an olive branch, saying that he does not seek "revenge, only justice, memory and truth." ¶6. (SBU) VENEZUELA: NO ONE TELLS US WHO OUR FRIENDS SHOULD BE. Kirchner defended his alliance with Venezuelan President Hugo Chavez and the decision to let Venezuela join Mercosur. He alluded to U.S. pressure to moderate Chavez, saying "for years we have been subordinate to other central countries. Today, when I hear that it is dangerous to have relations with South American countries, I wonder what is the risk of being close to a brother country like Venezuela that has helped Argentina so much." He added that Argentina will "always be a latinamericanist country." (Comment: upon reading the text of his speech, it appears that press statements that highlighted this brief remark appear to have taken it out of context. He actually was speaking in reference to Venezuela buying Argentine bonds without (political) conditions, but that people (read: the U.S.) were still questioning his increasing ties to Venezuela. End comment) (Additional comment: Kirchner's comments in support of Chavez and his comments on being subordinate to other countries and on seeing little risk in being close to Chavez, play well with the domestic audience. It also indicates that he either no longer sees any serious consequences to the alliance or no longer cares what those consequences could be. End additional comment.) ¶7. (U) ANOTHER SWIPE AT "BROTHERLY" URUGUAY OVER PULP MILL DISPUTE. Kirchner used the speech to again criticize Uruguay's handling of the ongoing paper mill dispute that has soured their relations. Kirchner addressed Uruguayan President Tabare Vasquez by name, saying Argentina wants to negotiate but that Uruguay only wants Argentina to give in. He added that "it is not Argentina that has violated the Treaty of Uruguay River," taking another swipe at Uruguay. He said that Argentina wants a real negotiation on the issue and peace with their "Uruguayan brothers and sisters." ¶8. (U) PLANNED 30,000 PIQUETERO-PERONIST RALLY GETS RAINED ON. According to press reports, Kirchner had arranged for 30,000 piquetero and peronist supporters to regale him on his way from the Casa Rosada to Congress. However, heavy rains and floods dampened the event, for which only about 600 dedicated Kirchner supporters materialized. Most did not get to hear or see his speech but had to stay sheltered indoors and some even sought shelter form the rains under one of the two large inflated penguins meant to symbolize Nestor and Cristina Kirchner. In fact, flooding throughout the city largely dominated the news, overshadowing Kirchner's speech, which was seen among political analysts as part of his presidential campaign. ¶9. (C) COMMENT. Beyond the two-plus hour litany of accomplishments, Kirchner's speech was little more than a a re-packaging of stump material speeches, facts of Argentina's recovery, and attack lines used on many previous occasions, with the added theater of the opening of Congress. Kirchner made the speech appear more provocative because it was where he departed from his prepared text that he was most combative and cuttingly critical. Ultimately, Kirchner's speech lost press headlines to the flood resulting from yesterday's deluge, the end of summer season and the return to work and school. But it appears designed as the way to lay out his record and themes for the campaign season ahead leading to October presidential elections. The next big event would appear to be the purported March 9 visit of Hugo Chavez, where Kirchner will try to highlight that his "independence" is bringing substantial economic benefits home for Argentina. END COMMENT WAYNE