Fact Check: Argentina

958 days, 18 hours, 23 minutes ago


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Cristina’s Alternate Reality

Welcome to Argentina, a nation that is led by its gifted and charismatic leader President Cristina Fernandez Kirchner!  In the alternate reality that President Kirchner and her leadership team have cultivated for Argentina’s citizens, there is no default!

And, Argentina pays its bills!

And, Argentina has tried numerous times to negotiate with holdout creditors, but to no avail!

And, Argentina is on a path to prosperous glory because of the Vaca Muerta Shale discovery!

In Cristina’s alternate reality, there is no correlation between her and her leadership team’s decision to default on bond payments and the sharply escalating economic crisis that Argentina is currently facing.  While the economy of Argentina literally crumbles around her, she’s defiant to any idea that a default could have been prevented, and whips her La Campora followers into a frenzied blame game against creditors, U.S. courts, a federal judge and the Obama Administration itself.

Whether an act of ultimate denial, or a cynical play to temporarily boost political support among her most hardened base, the distortions and misinformation being spread by Kirchner and her allies belie the hard realities facing the country.  For instance:

 – Never mind that China just announced it will require Argentina to settle its creditor disputes before moving forward with an investment and loan package that Cristina has heralded.  Maybe Argentina can mortgage some of the Vaca Muerta to China to sweeten the deal?

 –  Never mind that Argentine currency rates have been plunging in the wake of the country’s decision to default.  After the US dollar gained 22 cents against the Argentine peso in just one day earlier this week, Cabinet Minister Jorge Capitanich assured his countrymen that this was due to “speculative attacks” by “vulture funds acting through powerful international lobbies” to carry out attacks against Argentina.

 –  Never mind that Argentina’s bond payment to its clearing bank (BONY) was declared “illegal” by the court, and as a result, Argentina defaulted on its obligations to exchange bondholders. Economy Minister Axel Kicillof has triumphantly declared to the nation and the world that Argentina has “paid its debts.”

 –  And besides, last week President Kirchner announced a new exchange that would replace BONY with the state central bank, and would move the legal jurisdiction governing exchange bonds to Argentina!  We’ll see who signs up for this, but we’re doubtful that it will be very many.

 –  Speaking of BONY, well, it’s really their fault that Argentina’s leaders refuse to deal with the default mess that they created for themselves, and so this week it was announced that BONY was no longer welcome in the country.

 – And BONY is just the latest object of the Kirchner team’s invective.  Earlier this week, Cabinet Secretary Jorge Capitanich attacked the country’s unions, accusing them of being funded by the holdouts.  And, when companies like RR Donnelly decided to abandon the country due to stated “untenable business conditions,” President Kirchner accuses them of domestic terrorism, and threatens to jail their executives.

–  Never mind the growing corruption narrative involving Kirchner cronies like Lazaro Baez that is engulfing the Kirchner presidency, these stories are just “more attacks by the vultures.” “Move along everyone, there’s nothing to see here!”

In Cristina’s alternate reality, nothing is ever the fault of Argentina’s leaders – it’s always somebody else’s fault:  “vultures”, Judge Griesa, the United States, and now BONY.

But the problem for Argentina is that there are no alternate realities – the one that is being spun by its leaders is a fantasy.  The hard reality is that default was a terrible choice for Argentina’s leaders to make.  It’s already hurting the country, as experts predicted that it would. Argentina’s people deserve reality, not fantasy from their leaders.  Let’s hope that reality comes soon.