And what about Ecuador? Why, just two weeks ago, this country that is apparently on Snowden’s list of possible future homes passed new rules that impede free expression. The statute, called the Communications Law, prohibits anyone from disseminating information through the media that might undermine the prestige or credibility of a person or institution (you know, like revealing a government-sponsored surveillance program). The law also places burdens on journalists, making them subject to civil or criminal penalties for publishing information that serves to undermine the security of the state (you know, like revealing a government-sponsored surveillance program).
President Cristina Fernandez de Kirchner wants tax evaders hiding about $160 billion in dollars to help finance Argentina’s oil-producing ambitions. Her offer: Buy a 4 percent bond or face the prospect of jail time.
The tax authority announced the plan May 7, highlighting its information-sharing agreements with 40 nations and warning Argentines who don’t use the three-month amnesty window that they risk fines or arrest. Evaders have two options for their cash and the only one paying interest will be a dollar bond due in 2016 to finance YPF SA (YPF), the state oil company. The 4 percent rate is a third the average 13.85 yield on Argentine debt and less than the 4.6 percent in emerging markets.
Repsol YPF SA (REP), the Spanish oil explorer seeking $10.5 billion from Argentina for seizing its assets, will line up behind companies from Exxon Mobil Corp. to Unisys Corp. yet to be repaid by the most-sued nation on earth.
There are 26 cases pending against Argentina, more than any other country, at the World Bank’s International Centre for Settlement of Investment Disputes in Washington, the principal arbitration court for claims against sovereign countries. So far, it has refused to pay any of the tribunal’s judgments, according to a Bank of America Merrill Lynch economists’ report.
Fernando Zylberberg, a member of the Argentine men’s hockey team running through the streets of the Falklands capital Port Stanley with the slogan “to compete on English soil, we train on Argentine soil.” The advert included scenes of Mr. Zylberberg training on the steps of the Island’s Great War Memorial, which commemorates British sailors who gave their lives fighting the Germans in 1914.
as The Telegraph revealed today, the hockey player featured in the Falklands-set propaganda piece is now likely to miss the London Olympics, after being “virtually ruled out after being excluded from the 18-man Argentine hockey squad taking part in a 10-day tournament in Malaysia from May 24.” His shameless use as a political pawn by the Kirchner administration is undoubtedly a key factor in the decision by Argentina’s own Olympic Committee to drop him, after they distanced themselves from the controversial advertisement.
Zylberberg will probably be offerred a job in Cristina’s bureaucracy.
Never was a response to a global outrage more mealy-mouthed than the one from the U.S. after Argentina’s President Cristina Fernandez de Kirchner, standing under a portrait of Evita Peron, announced a brazen grab for YPF, the Argentine oil company that’s 57% owned by Spain’s Repsol.
Markets fell, world leaders denounced the violation of contracts and economically battered Spain rallied European Union support.
But the U.S.? “We are following developments on this issue. We are not currently aware of any WTO complaints related to this issue,” the State Department said.
Then, leading from behind after Spain vowed a “forceful” response, Secretary of State Hillary Clinton tried to toughen up: “Having an open market is a preferable model. Models that include competition and market access have been the most successful around the world.”
Which must have provoked a horse laugh from Buenos Aires. After all, Fernandez heard President Obama the first time when he declared that he free market “doesn’t work. It’s never worked.”The move — the largest expropriation since Russia expropriated Yukos in 2003 — not only hit Spain’s biggest company, already hit by a 38% loss of share value this year, it also moves Argentina sharply closer to another big default on its sovereign debt, trading in the debt swaps market shows.
The move follows Fernandez’s 2008 seizure of $24 billion in private pension funds and her tapping of central bank reserves to make debt payments. Investors already distrustful of Fernandez’s policies will see in this latest grab the start of a Chavez-like drive to expand the state’s control of the economy, further isolating Argentina, said Claudio Loser, a former International Monetary Fund official.
“It’s another sign that Argentina is moving away from the international economic community,” Loser, who oversaw Latin America at the IMF from 1994 to 2002, said in a telephone interview from Miami. “If Argentina already had trouble to get financing, this is going to make it even harder and hurt foreign investments.”
President Felipe Calderón of Mexico, while pointing out that Mexico owns 10% of Repsol): “This action will benefit no one.” (video in Spanish)
Hugo Chavez, still in Cuba, heartily approves (link in Spanish) of Cristina’s move. She’s a good pupil.
“And why should I care about this?”, you may ask. IBD explains,
If Argentina or Spain now defaults, it may mean the IMF will be called in for a bailout. Guess who gets stuck with the tab? That’s right, the U.S.
Meanwhile, U.S. investors own about 5% of Repsol. Its takeover hurts U.S. investors and our tax base. This should concern the indebted U.S., which if it did what other countries do, would defend its investors.
The U.S. buys 29,000 barrels a day from Argentina, a third of its output, and will need to find a new supplier as that collapses. Worse still, Argentina will lose investment in its vast shale reserves, the world’s third-largest at 22%. As that goes, prices will rise.
Worst of all, the expropriated assets may now go to China, significantly raising its influence in the region.
And, you’ll be seeing higher gas prices at the pump.