This WeekSunday, August 10, 2014
Hearts and minds
Politics & Labour
You can’t control events. You can’t control the news. You can’t control, at least in a democracy like Argentina’s, how public opinion will react to the news. It must be nerve-wracking for politicians. But it’s just the way it is.
Things are happening all the time. Argentina’s political landscape is constantly altered. It’s no different with the news of the confirmation that the grandson of Estela de Carlotto, the leader of the Grandmothers of Plaza de Mayo, has been identified through genetic tests. It’s joyous news that can be controlled by no one. The mood of the nation, if only momentarily, has shifted to one of happiness. The problems are still there: inflation, Vice-President Amado Boudou twice indicted on charges of corruption, and the long legal battle in the courts of New York with the holdout hedge funds. But all those stories will have to wait a minute, because the front pages have been dominated by the perfect ending to Carlotto’s epic search for her grandson. It is a story that will prompt many others. Those stories, surrounding the snatching of Carlotto’s grandson by the military when he was a baby, will also have an impact that no one will be able to control.
Carlotto’s 36 year-old grandson, raised as Ignacio Hurban by a couple who worked a ranch in Olavarría, Buenos Aires province, has alheld a press conference with his grandmother on Friday. He also met with President Cristina Fernández de Kirchner in Olivos on Thursday.
The city of Olavarría is now at the centre of a story that could eventually lead to a court investigation into how the snatched baby son of Carlotto’s daughter, a leftist Peronist militant executed by the last military dictatorship, was illegally adopted and then raised on the ranch of a powerful and influential resident.
There are many ways of looking at Argentina’s troubled history. But it is safe to say that there is no public support for the military’s systematic snatching of babies.
Ultimately this is the story that has come back to haunt the rulers of yore. The identification of Carlotto’s grandson has brought attention to the past. Every aspect of this story involves the leaders of Argentina since 1976.
President Cristina Fernández de Kirchner has the support of the Grandmothers of Plaza de Mayo, primarily for promoting the quashing of amnesty laws, approved by previous democratic governments. Fernández de Kirchner has also championed the search for the missing grandchildren.
For most of public opinion, it appears, the fact that Carlotto has backed the Kirchnerite administration is beside the point. Perhaps this is the biggest triumph of Carlotto’s organization. Maybe that is what consensus is all about, even when critics have said in the past that the Grandmothers of Plaza de Mayo should have been more careful about voicing their political stances on issues other than human rights. Now that too is beside the point. The opinions are many. But the consensus is one: the news that Carlotto has been reunited with her adult grandson is healing.
Move on, then, to the other developments. But keep in mind that public opinion is suddenly more supportive of Fernández de Kirchner. That could change once again. But polls show, for better or for worse, that there is backing for the way Fernández de Kirchner is managing, along with her unorthodox Economy Minister Axel Kicillof, the legal standoff with the hedge funds, which are referred to as “vultures” in Argentina.
The New York Judge Thomas Griesa last month ruled in favour of the vultures’ claim that they must be paid 1.5 billion dollars in full for the defaulted Argentine debt bonds that they hold. But Argentina has so far refused to pay after talks with Griesa’s mediator, Daniel Pollack, broke down last month. The deadline to heed Griesa’s ruling has expired. Argentina’s 539 million dollars deposited in the bank of New York Mellon have not reached the bondholders who accepted the swaps of 2005 and 2010.
Yet Fernández de Kirchner and Kicillof have continued to voice Argentina’s case and to fiercely criticized Griesa. Public opinion in Argentina does not support the New York judge. That would explain why very few opposition politicians are saying nice things about Griesa.
Griesa, predictably, is unfazed by this. On Friday the judge held a court hearing in New York. He told Argentina’s lawyers that the republic should stop making “false public statements.” If Argentina carries on like this, Griesa said, a contempt of court order will become necessary. What irked Griesa was a legal notice by Argentina insisting that it has technically paid the exchange bondholders. After Friday’s hearing Pollack, the mediator who is also criticized by Argentina, issued a brief statement declaring that he will continue to sponsor negotiations to reach a deal “for however long that may take.”
There are also developments outside Griesa’s court. The judge has complained about Argentina’s “inflammatory rhetoric.”
Argentina has been also setting off some legal fireworks. The CFK administration on Thursday formally announced that it was seeking a legal case against the US in the International Court of Justice over Griesa’s ruling in favour of the vultures. Griesa’s decision, according to the CFK administration, breached “Argentine sovereignty” and that made it a matter for the World Court to deal with. Yet there was a catch to the spectacular move. The World Court could only accept the case if the United States agreed to its jurisdiction.
A US State Department spokeswoman said in an email to international news agencies on Friday that, “we do not view the ICJ as an appropriate venue for addressing Argentina’s debt issues, and we continue to urge Argentina to engage with its creditors to resolve remaining issues with bondholders.”
The World Court move was thus reduced to a symbolic gesture that lasted no more than a day. Pollack meanwhile is sitting in his office hoping that the warring parts will agree to more negotiations for “as long as it might take.”
Yet the other side of the saga is that the markets seem eager for a settlement to be reached. All week the news agencies pumped out copy about a group of international banks looking to buy out the vultures (at least in part) presumably to then open talks to reach an out -of-court settlement with Argentina. The reports said that state-run Brazilian banks are sponsoring the talks out of fear of contagion. Is this Brazil coming to the rescue of Argentina in times of selective default to avoid contagion?
Prominent Argentine businessmen also insisted that it is still possible for local companies to make an offer to the vultures.
A purported plan by the ADEBA Argentine banks association fell through last month when Fernández de Kirchner and Kicillof complained that it would use the savings of Argentines as its guarantee. Last month’s botched ADEBA offer reportedly had the support of Central Bank head Juan Carlos Fábrega. Fábrega is now under pressure because he is out of the inner circle that includes Fernández de Kirchner and Kicillof. The vultures saga is another blast from the past because it brings back memories of Argentina’s massive default in 2001.
Strangely enough this is not bad news for the Fernández de Kirchner administration because Argentines after the meltdown of 2001 became incredibly suspicious of neoliberal economic recipes.
The fight with the vultures brings back those nightmares. Fernández de Kirchner addressed the nation in a broadcast on Thursday. She did not sound too excited about Argentina’s economic present. She announced a plan to promote employment, another one to promote the purchase of new buses and the reform of the CEDIN dollar certificates to purchase property (banks will be allowed to charge commissions). The president, despite the rhetoric, also looked uncomfortable when, for instance, addressing the issue of currency exchange controls and the real estate market crisis. Fernández de Kirchner also offered a long explanation about what she said was a world financial crisis.
Don’t expect CFK to shut up. Ultimately, all battles are for the support of public opinion. Fernández de Kirchner needs that support to serve out her last mandate until next year because the ruling coalition lost in all the major districts in last year’s midterm elections. Most of the time the president has been under intense political pressure because her popularity had dropped.
Boudou’s legal problems have also had an effect in the Senate. The opposition senators have refused to attend Upper House sessions because they are presided by Boudou. Cabinet Chief Jorge Capitanich on Wednesday saw the opposition senators walk out of the session during his routine report to the Upper House. Boudou is unpopular and his legal troubles will continue.
Yet Fernández de Kirchner has found the support that she lacked by holding her ground against the vultures. The battle to win over the hearts and minds of the public will continue in Argentina all the way up to next year’s presidential elections. Like in any democracy — however dysfunctional.