Monday, January 11, 2010

Argentine Leader Fights Bank Move

Mrs. Kirchner and her husband and predecessor, Nestor, are fighting back, but their popularity is near an all-time low, they don't have much money in the till without the reserves, and only 21 months remain until elections in which Mr. Kirchner has been laying groundwork to run.

The Kirchners reacted fiercely when Judge María José Sarmiento on Friday barred the central bank from transferring reserves and reinstated the bank president Mrs. Kirchner had fired the day before for refusing to do so. Mr. Kirchner said that his wife was victim of a "permanent conspiracy" and said Judge Sarmiento was biased and the ruling "a shame" to the judiciary.

It is a little weird to keep reading about Peronists. The Kirchners are supposed to be Peronists, yet they are not the only ones to claim the mantle of Juan Domingo Perón, a fascist military dictator.

Part of the reason [for the erosion of presidential power and rising opposition thereto] is that Kirchners are exhausting the power of the purse, critical in the patronage-oriented Peronist political system. Total public spending grew from 29.5% of output in 2003 when Mr. Kirchner took office to around 37% in 2008, his wife's first full year in office. With a budget surplus withering away, Mrs. Kirchner tried to shore up funds in 2008 by raising the grain export tax. Nationwide protests by farmers led to a vote in the senate that torpedoed the tax increase.

Presidenta  Kirchner nationalized pensions, and now is trying to use currency reserves to service national debt, so to have more funds free for her own purposes. Her line of defense is to say, in snippets of speeches and news conferences I've seen on Spanish-language news (Anglo news utterly ignore anything that is not an acute crisis in Latin America), that when the opposition were in power they did not govern well, thus they should now stop their opposition to her programs and let her govern.

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