Argentina: President Kirchner Cancels Trip to Bolivia,

UNCLAS BUENOS AIRES 001092 PASS NSC FOR MICHAEL SMART US SOUTHCOM FOR POLAD SIPDIS SENSITIVE E.O. 12958: N/A TAGS: PREL AR BR VE SUBJECT: Argentina: President Kirchner Cancels Trip to Bolivia, Chavez Fulminates Against "Fifth Column" Ref: BUENOS AIRES 1089 ¶1. (U) In the face of protests in Tarija, Bolivia and reportedly at the request of Bolivian Foreign Minister Choquehuanca, President Cristina Fernandez de Kirchner Kirchner and visiting Venezuelan President Hugo Chavez cancelled August 5 their planned trip to meet with Bolivian President Evo Morales in the Bolivian departmental capital. The abrupt change of plans led CFK to preside over her second press conference in three days to explain the decision. In her remarks, she emphasized a continuing commitment to support the institutions of the Bolivian government -- and by extension, Morales. She also underscored that the cancellation would not affect contracted Bolivian gas sales to Argentina. ¶2. (SBU) President Chavez gave the Argentine press a more colorful and lengthy explanation for the cancelled trip. He blamed the disturbances in Tarija and other parts of Bolivia on the United States ("el imperio" -- the empire),warning the alleged U.S.-sponsored "fifth column" in Bolivia that they would suffer as well for using force and violence to undermine democratic processes. "I believe the imperialists are getting desperate," he said, "sending fourth fleets and activating fifth columns." Chavez also held the United States responsible for media reports of differences among Kirchner, Chavez, and Brazilian President Lula. The Argentine press, Chavez insisted, was filled with powerful tools of the oligarchy, exploited by the United States (more "quinta columnas"). The United States, he said, "establishes the arguments and its lackeys obey." Chavez's exposition included references to President Kennedy's assassination by the "imperial establishment", warnings about U.S. bank solvency, and swipes at the IMF over conditionality. ¶3. (SBU) Shortly before leaving Buenos Aires on August 5, Chavez confirmed that the GoV had purchased an additional US$ 1 billion in Argentine "Boden 2015" bonds at an effective yield of between 14 and 15 percent. "We have great confidence in the Argentines," Chavez said. This is Venezuela's second bond purchase this calendar year, bringing total Venezuelan purchases of Argentine sovereign debt to US$ 7.6 billion (cash value). ¶4. (SBU) Comment: The cancelled trip likely undermines whatever domestic gains CFK hoped to accrue through this round of foreign policy activism. Cancellation was evidently the right call, but it cannot mask the profound mistake of planning to wade into Bolivian politics arm-in-arm with Hugo Chavez. Argentina's press, meanwhile, clearly benefited from the good copy offered by the Bolivarian leader. End Comment.