By Michael Soltys, Senior Editor of Buenos Aires Herald

The government seemed to be spending the 199th anniversary of the birth of Argentine nationhood yesterday with more respect for Venezuela’s sovereignty than for Argentina’s with its limp reaction to the decision of Venezuelan President Hugo Chávez to nationalize three steel companies belonging to the Italo-Argentine Techint group. Following an initial silence, Federal Planning Minister Julio De Vido (and not Foreign Minister Jorge Taiana, who supposedly handles Argentina’s external relations) spoke of an “ordered solution” with suitable compensation but not a hint of protest.

Since Argentina hardly rates as a global economic player (with honourable exceptions such as Techint, Arcor and Pescarmona), the main concern centres around the local implications of this latest development — the real message behind the unprecedentedly unanimous and vigorous repudiation of the Chávez move by all major business groupings here. If the fear is that the Kirchners will spontaneously imitate their exuberant strategic ally in nationalizing right, left and centre, there is little cause for concern because the presidential couple has never taken the initiative on this front — the De Vido formula has always been to seek state control without responsibility, leaving the latter in the hands of the hapless original owners from the private sector with crony capitalism as the Plan B rather than nationalization (nor do shrinking revenues permit the luxury of nationalizing many more loss-makers like Aerolíneas Argentinas which costs the state four million pesos a day). But this formula tends to lead to involuntary nationalizations when life is made impossible for the private-sector ownership by incessantly escalating state intervention.

However far away the three Techint steel plants in Venezuela might seem, in many ways they are at the heart of the election campaign because of the implications for the “model” supposedly at stake in next month’s vote. Silence is usually taken as assent, raising the question as to whether the complacent response to the expropriation of Techint interests might not mean more nationalizations here — not only in public services as until now (Aerolíneas, Aguas Argentinas, the Post Office, etc.) but in the manufacturing sector (Massuh paper mill, all the new equity resulting from the seizure of the private pension funds and perhaps even Techint firms) and even the financial sector with the heavy hints being dropped about interest rates. Nationalizing such a slumping sector as steel amid a global crisis might be a very different proposition to grabbing soy windfalls amid a commodity price boom but the blow to market confidence is the same. As on the original May 25, the people want to know what is going on.