MEDIA REACTION: IMF-ARGENTINA; THE US IN AFGHANISTAN;

UNCLAS BUENOS AIRES 001111 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: IMF-ARGENTINA; THE US IN AFGHANISTAN; 10/07/09; BUENOS AIRES ¶1. SUMMARY STATEMENT Leading international stories today are focused on Argentina returning to the IMF fold after its alleged "emancipation" of 2006; and the war in Afghanistan. ¶2. OPINION PIECES AND EDITORIALS - "More make up" Leading "Clarin's" political columnist Jorge Luis Velazquez writes (10/07),"The (Argentine) Government did not meet its maximal goal - getting IMF support without any kind of monitoring, a sort of blank check for what it interprets as a sound financial, tax and foreign exchange situation. "Just like any other member of the 'club', it had to accept the visit to the country of an IMF delegation to perform an annual review of the country's economy. This is why the negotiation will be limited to some sort of 'make up' - that the final statement does not include any objection to the economic scenario, which the official discourse considers 'revealed truth.'" - "Convincing Kirchner rather than the IMF" Daily-of-record "La Nacion's" political columnist Carlos Pagni opines (10/07),"Nestor Kirchner is (Economy Minister Amado) Boudou's obstacle in his rapprochement with financial markets. The minister had thought the IMF meeting in Istanbul could be the scenario to announce the default bonds swap. However, Kirchner made him postpone the announcement. The President's husband does not want to take the step without having agreed with the IMF on the terms of its Article IV review of the national economy. "... Kirchner is not the only obstacle in Boudou's road. It will also be necessary to persuade the opposition in the Argentine Congress that they are not infringing on the 2005 Bolted-shut legislation, which prohibits any possibility of negotiating the debt to holdout bondholders... "... Kirchner does not want the IMF review to include recommendations on the country's inflation rate or the INDEC national statistics agency... He fears that the picture of Washington officers arriving in Ezeiza could be seen as a sign that he has surrendered to the enemy... "... Argentina's financial suffocation has sparked increasing political tensions. Unable to resort to markets, governors seek the Argentine Government's cooperation or they raise taxes amid the recession, just like Daniel Scioli has done. The choice would be issuing quasi-currencies... Resources are barely enough to mitigate the most urgent social demands, while protest demonstrations multiply outside the palace." - "Imminent Mass Financing" Liberal, English-language "Buenos Aires Herald" editorializes (10/07),"Soft-soaping the contradiction of returning to the IMF fold after the 'emancipation' of 2006 will be difficult but by no means impossible. A G20 economy returning to international capital markets opens up the vista of so many billion dollars that creditor goodwill should abound... "Quite apart from the political camouflage, the IMF admittedly has less reason to be especially demanding with Argentina because no new loans are being requested for now - foreign currency reserves almost 50% higher than 45 months ago plus a hefty trade surplus and the lowest country risk since mid-2008 mean that Argentina is nowhere near default. "Yet aside from even the most solvent economies not being exempt from Article IV stipulating IMF monitoring, there would be valid questions for an IMF mission within its task of investigating the Argentine economy's fiscal, monetary, debt, inflation and banking scenarios - for example, the capital flight of the last 30 months or INDEC statistics bureau's methods for calculating inflation. The aim of the mission is to be low-profile but if that profile were low to the degree of being invisible, much of the point of returning to the IMF fold would be lost - like Caesar's wife, it is almost more important than Argentina be seen to be correct." - "The US admits its retreat in Afghanistan" Daily-of-record "La Nacion's" Washington-based correspondent Silvia Pisani writes (10/07),"Eight years after the US invasion of Afghanistan, the Barack Obama administration has it clear that withdrawal 'is not a choice,' according to Defense Secretary Robert Gates, who even admitted yesterday that the Taliban are winning the battle. "During a CNN interview, Gates pointed out that the Taliban are winning the battle in Afghanistan because Washington and its allies were unable 'to send enough troops' to ensure the victory. 'However, we will not leave Afghanistan. The debate is on the next steps to be taken. "... The Democratic administration has to decide how to respond to General Stanley McChrystal's request for 40,000 additional troops for Afghanistan. The Obama administration has not made a decision yet now that the US presence in Afghanistan is one of the most unpopular causes in the US according to several opinion surveys. "... The war in Afghanistan is already eight years long. During the last months, many US soldiers have died in the confrontation. In recent hours, Obama met with Congressional leaders and their military advisors in order to decide how to tackle the impaired safety in the region, as a previous step to deciding whether additional troops should be sent to the Asian country." To see more Buenos Aires reporting, visit our classified website at: http://www.state.sqov.gov/p/wha/buenosaires MARTINEZ