Monday, April 28, 2008

The Ballad of Hugo y Cristina: Will it be decision time?

A rapport had already been established between Venezuela’s Hugo Chavez and Argentina’s ex-President Nestor Kirchner before the latter became the first First Gentleman in the history of Argentina. He confirmed "integration" between the two countries and nothing until the talk of Chavez re-nationalising SIDOR had threatened this. That is to say nothing until this had contradicted who both Kirchners’ had in their close circle.

Last Friday Lady Kirchner met with the powerful Businessman Paulo Rocca who is the President for and top shareholder of the Techint Group - the Group which had a majority stake of 60% in the steel merchants SIDOR – to discuss how to carry out their part in the re-nationalisation process.

Rocca - whose personal interest would have been to secure a minority share in the Argentine-Italian company, so it can maintain access to the US market - is still close to Nestor Kirchner. However since Chavez’s part in the Orinoco Declaration in late 2005, which saw Chavez buy a large amount of Argentina’s debt so as to, in his own words “help Argentina end its dependence on the IMF,” the Kirchners have remained faithful to him.

Chavez had curried support from Cristina Kirchner, among others, when he struck up a humanitarian accord with Columbia in securing the release of hostages taken in by the Revolutionary Armed Forces of Columbia (FARC). Earlier on this year, Kirchner united with Chavez when he accused the Columbian Government of committing a ‘war crime’ around the time the Columbian military raided a rebel camp inside Ecuador.

The two leaders also shared a defensive last year against the Miami court who accused the Venezuelan Government of secretly funding Cristina Kirchner’s election campaign the sum of $800,000 (£392,000).

The re-nationalisation of SIDOR has come at a fragile time for Kirchner who, though originally opposed to any change to the steel firm, must decide to do one of two things; be seen to defend the national capital as Rocca sees fit (as he addressed in a letter for Kirchner before their meeting) or be seen to favour a Venezuelan Government majority stake, along with a compensation fee Chavez and Rocca accept on during their negotiations.

For Chavez, he must risk upsetting the Argentines and going against Kirchner’s wishes in order to deliver his promises of nationalising “all that was privatised” which means securing wage increases of 55%, pension deals and winning back support for his “Bolivarian Revolution.”

1 comment:

Keith said...

This is very interesting, nice work