Paper mint

The nationalization of the Ciccone money-printing company is not the first time the Cristina Fernández de Kirchner administration has ignored an opposition complaint for ages, only to end up adopting it as its own policy. At least this inconsistency has the advantage of disarming the opposition and critical media since they can hardly object to the government finally cracking down on this focus of scandal. Moreover, printing money is intrinsically a state function in even the most free-market of economies — the deviation from the norm surely lies in having privatized this role (and delegated it abroad), not nationalizing it now by absorbing Ciccone into the Mint. And quite apart from this question of principle, the state happens to be the main creditor of Ciccone’s various irregularities.

Yet the devil lies in the detail and nor are the political benefits of this new move entirely clear. On the one hand, the government effectively buries the always shady issue of Ciccone’s ownership by making the company its own — on the other hand, even the smooth passage of a virtually unopposed bill through Congress might well serve to bring this political ulcer back into the public eye in a tricky winter month while probable opposition acceptance of the principle of mint nationalization will not spare the government from some ferocious sniping. Compensation loomed as a delicate issue because Ciccone’s ownership would require prior clarification but Economy Minister Hernán Lorenzino gave us to understand yesterday that the volume of tax arrears precluded the need to pay anything (any more than to Spain’s Repsol in the YPF expropriation last April). Given that Ciccone is the object of ongoing legal investigation (involving such high-ranking officials as the vice-president and the AFIP tax bureau chief), it is to be hoped that the CFK administration does not yet again confuse the roles of state and ruling party when it takes over company assets (including documentation) with the disappearance of key evidence.

This latest nationalization is far less epic than YPF in the eyes of its supporters and far less controversial in the eyes of critics but it raises the question of whether this is the shape of things to come with the run of state takeovers in recent years (YPF, Aerolíneas Argentinas, the Post Office and the waterworks are only the most prominent examples). Given that almost all these nationalized companies are often massive loss-makers, the CFK administration should be wary that whatever is saved by “fine-tuning” subsidies is not lost this end.