December 11, 2017


Saturday, May 31, 2014

Is Paris really worth the mass?

By Marcelo J. García
For The Herald

The chairman of a big industrial company told a group of investors and analysts in the US this week that “for the first time in many years” good economic news is coming from Argentina. He was talking a few hours after the government announced it had clinched an agreement with the Paris Club group of creditor nations on almost US$10 billion of debt defaulted 13 years ago.

News tends to be schizophrenic and moody at times — and this is one of those times.

The government celebrated the debt agreement in Paris as if it were a last-minute victory goal by Messi in the soccer final against Brazil, and a choir mostly sang along to match the pre-World Cup spirit. Once the noise of celebration settles, everybody will come to terms with the notion that the game is still on. Just as quickly, the agenda moved to Vice-President Amado Boudou and his subpoena yesterday morning.

Abroad, Argentina had built itself the bad student’s reputation for too long and the government’s new take on certain economic affairs is proving hard to sell. But evidence is stronger than prejudice when it comes to international politics, and most especially international finances. Some of the observers who were a few days ago telling their international financial audiences that Argentina was moving toward a precipice similar to devaluation days in January are now trumpeting the country must be doing some things ok.

“Is Argentina Starting To Right Its Economy?” writes a columnist in Forbes. “It marks clearly that the relationship between Argentina and the international financial community has improved,” the piece quotes an analyst ( A Reuters report described the agreement as “landmark” ( “Recalcitrant, moi?” asks a columnist in the Financial Times, adding that it was “a sustainable and definitive solution.” A piece on Bloomberg News says Argentina was left “on the cusp of returning to international bond markets.” And an Economist blog entry is headlined, “Argentina and the capital markets: At least they have Paris.”

Most of the foreign news analysis however acknowledges that hurdles still remain for the country to regain access to the capital markets to surf a smooth transition to the presidential change of the guard in December 2015. “The country has left the toughest deal (holdouts) for last,” they say at the Economist. “Analysts warn that it will not be that easy” to access foreign cash, another market analyst writes.

The government deserves some celebrating after a summer stuffed with bad news but beating the drum too much could be counterproductive, especially as any real positive effects to the Paris Club agreement (direct foreign investments) are likely to only materialize after its term in office is over. The first down payments, on the contrary, are around the corner.

But one should not underestimate human subjectivity when analyzing even the most rational (if that even exists) of the political events. The overrating of a debt agreement – the case of both the government and the media – shows a desperate need for game change in Argentina’s political and economic agenda. The ruling party seems to be still the only actor capable of delivering it – at least until the electoral race gets fully under way.


Overall the government enjoyed the best week in months in terms of the news agenda… and then there was Boudou yesterday morning. One has to test memory to find two consecutive lead headlines with positive news for the government in the country’s best-selling newspaper, Clarín. On Thursday, Clarín changed its front page at 1am to flag the deal with the Paris Club, and on Friday it ran another lead saying that the reactions to the agreement had been “positive.” The media-monitoring site Diario Sobre Diarios says such thing had not happened in at least five years, since the government went to war with the Grupo Clarín media conglomerate.

Yet upon hearing about its subpoena, Boudou stuck to the media explanation of his problems and insisted on targeting Grupo Clarín. “This has to do with the media agenda, and they tried to cover the good news that the government had reached an agreement with the Paris Club,” he said on a radio interview. “This is the agenda of the newspaper Clarín.”

Boudou’s line may be outdated, for at least two reasons. As the race for the 2015 presidential elections speeds up, each government faction is jockeying for its own positions. “I am part of the government,” Boudou said yesterday. But it not clear the (whole) government is part of his defence strategy. Boudou also insisted on placing his wrath, as he has in the past, on the CEO of Grupo Clarín, Héctor Magnetto. Magnetto will soon quit his control of the daily Clarín, as the media giant breaks itself up to comply with the anti-trust rules of the Media Law passed in 2009. The CEO will keep his interests in the group’s cash-cow cable TV company. The vice-president’s defence strategy might need to adapt to the new times.


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Edition No. 5055 - This publication is a property of NEFIR S.A. -RNPI Nº 5343955 - Issn 1852 - 9224 - Te. 4349-1500 - San Juan 141 , (C1063ACY) CABA - Director Perdiodístico: Ricardo Daloia