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2/24/09

Argentina and the Call to Default

Eduardo Duhalde (for it is he)

If you read El Porteño's excellent post yesterday that explains the key present role of Eduardo Duhalde in Argentine politics, you'll understand that what follows is a very significant move towards Argentina defaulting in 2009 or 2010. If you haven't read it yet, here's the link again. You'll see just how important Duhalde is right now.

Now here's the crunch: Duhalde gave an interview on Argentine radio this morning and basically said that if all the rest of the world were in financial trouble and were defaulting on loans, they'd be stupid to pay up. Remember this is the most powerful man in Argentine politics outside of the Kirchner block and many expect the Duhalde-led pact to make a very strong showing in the 2009 end of year elections. Do not take Duhalde or his words today lightly; this is a serious call for Argentine default.

Here are some direct quotes from this morning's interview put through the Ottotrans™:

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"It's not that simple, this bill is not ours to pay. Latin America has to rebel like Africa and Asia. We have nothing to do with this. There's no reason why we should be hurt by this."

"The government does what it can (but) there is no deep analysis about what is happening."

"If the world is bankrupt, let's put our debt in with the others and see what happens later. What we have to do is take care and look after what is left of our reserves."

"It's very difficult and I don't think that much more can be done. The government has to think seriously in what I've said; this bill isn't ours to pay. This crisis was born in the USA, it hurts all of us and they have the chance to print money and save their own people. We don't have that opportunity.

"(During the Kirchner government) unfortunately they paid the U$9Bn dollars in IMF debt. It was announced in such a triumphant way that it was like Fidel Castro descending from the Sierra Maestra, when in fact it was stupid."

"That they now want to pay the Paris Club debt of other unnecessary highlights the fact that in this government there is no deep analysis about what is happening and what must be done."

UPDATE: Dear Mr. Dowsett, learn Spanish.