September 21, 2014
Two win-win situations
The public opinion of an often polarized country seems to be expressing itself with remarkable clarity this month regarding the government’s battle to avoid technical default against the vulture funds. even if in potentially opposite directions — an overwhelming majority across the political spectrum repudiate the predatory vulture funds but at the same a clear majority of around four Argentines out of every seven would like to avoid default, even at the price of bowing to United States jurisdiction and paying off the reviled holdouts. But if the vulture funds fancy that they enjoy a win-win situation between the payment ruled by Manhattan judge Thomas Griesa and credit default swaps, the Cristina Fernández de Kirchner administration can thus claim its own win-win situation in political terms — greedy billionaires and pedantic judges provide an almost temptingly perfect target for a populist government should it fail to avert default while if they do finally settle and pay up, only a minority will reproach them.
Just to underline that rejection of the American Task Force Argentina propaganda bankrolled by the vulture funds is far from limited to CFK loyalists, this country’s leading conservative daily last weekend ran an extended article roundly dismissing as “false” ATFA’s claim that there was no basis for the government’s argument that the 1.4 billion dollars pending in Griesa’s courtroom could escalate to “the fabricated number” of 15 billion. The article cited various private consultancies critical of government economic policies (including Daniel Marx, who fielded foreign debt under three presidencies and who calculated 15 billion as his minimum sum with a possible maximum of 22 billion) arriving at the same figure.
Not that everything is sweetness and light in the debate over debt negotiations nor that the government is immune from criticism (some of it less justified than others) but much of the tension seems to come from the conflicting aims of defying an injustice and resolving a dispute which most people share. There does seem to be a broad consensus uniting the government, the opposition and public opinion at large based on an almost universal distaste for the vulture funds and a widespread aversion to default based on the traumatic aftermath after the debt repudiation of 2001 (even if the current situation has almost nothing in common with that experience except the word “default,” least of all any repudiation). In short, a public opinion which should leave the presidency feeling anything but lame duck.