Thursday, April 19, 2012

Christina Kirchner strikes again

The assaults on neoliberalism, like most assaults on hegemony, are most effective on the periphery.  And while it is damn exciting to see an electoral attack on this most vicious form of stupidity in France, the folks who have been working at this the longest and most effectively are found in South America.

The towering intellectual giant in the battle against neocolonialism / neoliberalism was Nestor Kirchner who stepped in to save Argentina from economic and political calamity in 2003.  I consider him one history's greatest economic thinkers—but then, I have long liked the thinking of the great minds on the periphery.  I noticed that people who rise through the ranks near the centers of power tend to be toadies with serious butt-kissing skills and little else.  The subject of economics CAN be made very complex but most of that complexity is theological high-speed algebra.  If you don't have to impress people with a mastery of the "divine" principles of economics, the subject is actually quite understandable.  Unburdened from economic high holy theological bullshit, the guys on the periphery can concentrate on the problems of making an economy prosper.  Kirchner was one of those people (and goodness knows, I have tried to be one of those people myself.)

But Kirchner died and left behind a widow who has become arguably the most interesting female head of state since at least Queen Christina of Sweden (1626-1689), and maybe ever.  In a country where macho is elevated to a high art form, she has managed get a bunch of men to follow her because she appears to be fearless.  And the secret to her fearlessness is that she was right there when Nestor proved that the IMF and the rest of the banksters were paper tigers.  It took a lot of courage to take on IMF and Christina probably provided more than her fair share.  IMF could huff and bluster but in the end, you really don't have to pay attention to the guys behind the curtain (Thank You Frank Baum).  Folks forget that Nestor also began the rollback of neoliberal privatizations starting with the cancellation of France's Suez takeover of the water supply of Buenos Aires in 2006.

But I would just like to point out one thing to President Christina Kirchner if I could.  It's one thing to point out that neoliberalism is at best idiotic when it is not criminal, or that IMF and the gang of banksters are paper tigers, or that neocolonial predators like Suez have no right to control the drinking water of your biggest city.  Yes indeed, you not only got away with all of this—you gave hope to people around the world whose lives are being stolen by economic gangsters.  But this is tangling with the world of oil.  Yes, this is Repsol—the company many call the most incompetent firm in the business.  Yes, Spain is teetering on the brink of collapse so now is a dandy time to move.  Yes, you have a good friend running an oil country in Chavez so I'll bet you can get an insider's advice.  But it is still the awl bidnus.  Jus' sayin'!

Argentina moves to nationalise YPF energy giant


Argentina's President Cristina Kirchner announced on Monday that she will ask Congress to expropriate 51% of leading energy company YPF, which is controlled by Spanish giant Repsol, sparking concerns in Spain and the European Union.

AFP - Argentina said Monday it would expropriate the country's biggest oil company, YPF, controlled by Spain's Repsol, taking a 51 percent stake to be shared by the state and oil-producing provinces.

The move, which had drawn expressions of concern from Spain and the EU, was announced to applause at a meeting between President Cristina Kirchner and her cabinet and Argentine governors.

Reading a statement at the meeting, an official said YPF-Repsol "is declared a public utility and subject to expropriation of 51 percent of its assets."

"Of the shares subject to expropriation, 51 percent will belong to the state and the remaining 49 percent will be distributed among the provinces" that produce oil, the declaration said.
Spain immediately said it would respond to the move.

"I am convinced the government will make the correct response to this situation," the secretary general of the ruling conservative Popular Party, Maria Dolores de Cospedal, told reporters.

The government will make "the most suitable response for the defense of nationals interests... a sufficient and complete response to defend the interests of Spanish companies in Argentina," she added. more
I love this piece.  I am sure that Kirchner has overwhelming political backing for her move against Repsol.  But yes indeed, it was possible to find a politician who thinks this a bad idea.  Want to find a good neoliberal—go to the center.  In this case it is the mayor of Buenos Aires.

Backlash Against Argentina Begins Over Its Plans To Nationalize A Public Energy Company

Mamta Badkar | Apr. 17, 2012

Repsol's chairman Antonio Brufau said he will ask Argentina for $10 billion in compensation, after Argentinian president Cristina Fernández de Kirchner yesterday proposed a bill to nationalize YPF, according to the Buenos Aires Herald.

Repsol has a 57.43 percent stake in the company and the company's CDS has been spiking. The government has accused YPF for not investing enough in its local oil fields and for not producing enough oil, which lead to a 110 percent increase in oil imports last year.

The matter has been divisive in Argentina where people have come out in support of the president's plan. But Buenos Aires city mayor Mauricio Macri has said that his center-right PRO (Propuesta Republicana) party does not support the decision and that this is likely to make things worse for the Argentine people.

Argentina's decision to nationalize YPF doesn't come as a shock, but most had expected the country to expropriate about half of Repsol's stake in YPF, not all of it. In response, Spain has already pulled its ambassador to Argentina which is a harbinger of an international backlash.

Argentina already risks alienating Spain it's biggest foreign investor. The European Commission has also called off a meeting scheduled for April 19 - 20 between EU and Argentinian officials that was part of an existing bilateral trade and economic treaty between the two. more
Spain vows revenge.  Ooooooooooo!

Cristina Kirchner takeover of energy company as Spain vows revenge

The Times   April 19, 2012

EUROPE threw its weight behind Spain yesterday after a diplomatic war broke out between Madrid and Buenos Aires over Argentina's decision to take over a multi-billion-dollar energy company.

In the wake of tensions between Britain and Argentina on the 30th anniversary earlier this month of the Falklands invasion, President Cristina Fernandez de Kirchner risked further international alienation by pushing on with nationalising Yacimientos Petroliferos Fiscales, in which Repsol, a Spanish energy group, has a majority shareholding.

In response, Spain launched a trade and diplomatic offensive against Argentina, rallying allies in Brussels and the G20 against the move to take over 51 per cent of YPF. The EU postponed indefinitely meetings it was due to hold with Argentina today and tomorrow, and the President of the European Commission, Jose Manuel Barroso, said he was "seriously disappointed".

Since the privatisation of YPF in 1999, when it was sold for $15 billion, it has become a nationalist rallying point in Argentina, second only to the sovereignty of the Falklands.

Spain promised to announce reprisals after a government meeting. Spanish Industry Minister Manuel Soria said Argentina would suffer "consequences" in the "diplomatic field, the industrial field and on energy".

Arriving in Mexico for a World Economic Forum meeting, Spanish Prime Minister Mariano Rajoy said: "I must express my profound unease. It's a negative decision for everyone." Spanish Foreign Minister Jose Manuel Garcia-Margallo said Argentina had shot itself in the foot and warned: "The most effective sanction in this world . . . is the loss of global investor confidence." more
This is well beyond precious.  Here Britain's Foreign Secretary weighs in on how serious a crime against Holy Neoliberalism Argentina's nationalization of Repsol is.  In fact he warns that it could leader to a "wider protectionist agenda."  (I believe I am going to need a fainting couch—no really.)  I love that he believes that this will hurt Argentina by "reducing its attractiveness to international investors."  I believe, Mr. Hague, that getting rid of those crooked investors is the whole point of this exercise.  While you folks in London might believe such "investments" are a good thing, those of us out here in the periphery who see great wealth sucked out of our economy do NOT agree.

Hague attacks Argentine seizure of Repsol oil assets

William Hague has hit out at Argentina after the country's government said it was seizing YPF, the South American nation's biggest oil company which is controlled by Spanish energy group Repsol.  Hague, the Foreign Secretary, said Britain would work with Spain and the EU to ensure Argentina upholds its 'international commitments'.

9:12AM BST 18 Apr 2012

The Foreign Secretary warned that the move by controversial president Cristina Fernandez was part of a wider protectionist agenda. Ms Fernandez has said she will nationalise a large part of YPF, reducing Repsol's stake from 57pc to 6pc. Spain has threatened swift economic retaliation against Argentina over the plans, which are part of Argentina's efforts to curb fuel price increases.

Mr Hague said he was "very concerned" by the developments.

"This is the latest in a series of trade and investment related actions taken by Argentina which are damaging to business interests and will undermine Argentina's economy by reducing its attractiveness to international investors," he said.

Argentina and Britain have been locked in a diplomatic battle over oil exploration in the Falkland Islands for months.

He said: "The Argentine Government has made no secret of the fact that it wishes to reduce imports and boost its domestic trade surplus through a variety of restrictive trade measures.

"This goes against all the commitments Argentina has made in the G20 to promote transparency and reduce protectionism. We will work with Spain and our EU partners to ensure the Argentine authorities uphold their international commitments and obligations."

Spain has called in Argentina's ambassador over the nationalization order by Ms Fernandez, a move that sent Repsol shares tumbling but delighted many ordinary Argentines.

"I must express my profound unease. It's a negative decision for everyone," Spanish Prime Minister Mariano Rajoy said at the a World Economic Forum meeting in Mexico. more


  1. When I was in Argentina, I really wanted to understand what was it about Peronism that was the only strong party in the country. I stayed in this buenos aires apartment in downtown, which allowed me to go study Peron´s life. I went to his house and learnt a lot. Now I can say I understand the basis of Cristina´s doctrine!

  2. you may then go back and lecture Argies on it!!! He ruined the country with his welfare demagoguery