October 31, 2014
If Noah Mamet has been going through a testing time nailing down Senate confirmation as Washington’s next envoy to Argentina, some recent events here underline the complexity of the relationship for which he will have to establish his credentials. Not for the first time, the Cristina Fernández de Kirchner administration seems to be moving in two directions at once. In no state-of-the-nation speech has CFK been kinder toward the world superpower than last weekend, praising both its remarkable progress in reducing energy-dependence and its intelligent methods for allowing protests without disrupting everyday life — in recent days we have seen one possible reason for this benign attitude with United States Solicitor-General Donald B. Verrilli Jr. stepping up to the plate as Argentina’s amicus curiae in its litigation with the “vulture funds.” But on Wednesday Foreign Minister Héctor Timerman replied in the harshest terms to a Washington State Department report on Argentina’s escalating drug penetration by asserting that the US was the big problem as the world’s leading drug consumer (and hence with the most money-laundering too) with no authority to lecture anybody — a line more or less echoed by Cabinet Chief Jorge Capitanich on Friday. These words reflect a need to deflect elsewhere the recent focus on the drug problem by Supreme Court Chief Justice Ricardo Lorenzetti among others but at the same time there is a competing need to stay on the right side of the US in order to return to world capital markets, including the litigation with the holdout creditors and the Paris Club debt. So which is it to be — does the CFK administration itself know what it wants?
As if these choices were not already difficult enough, the US Supreme Court injected a new complexity into the situation last week when it ruled against Argentina in favour of British Gas, ordering the payment of 185 million dollars to the utility as compensation for the losses sustained when its rates were first pesofied and then frozen in early 2002. The obvious Argentine reaction might seem to be to ignore it, as so many adverse overseas court rulings, but this would be suicidal when trying to obtain Supreme Court intervention in the case against the holdouts — especially when Verrilli’s initiative suggests that the US might be sympathetic for reasons of its own (e.g. not to set a precedent against debt restructuring worldwide). But at the same time the adverse British Gas ruling suggests that even after massively swallowing its pride, the CFK administration could still lose — so why take the risk?
It’s complicated — is Mamet sure he wants this job?