Athens from Buenos Aires

Buenos Aires is a long way from Athens, but the suffering of the Greeks is close to the heart of the Argentines. Many are cheering Greek courage in standing up to the IMF and friends, even if this is simply what it takes to get back to the negotiating table. Español.

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Francesc Badia i Dalmases
9 July 2015
Tomada el 8 de julio de 2015. European Union 2015 - European Parliament. Flickr. Some rights reserved._1.jpg

8 June 2015. European Union 2015 - European Parliament. Flickr. Some rights reserved

The concurrence of the  Greek referendum and local and provincial/regional elections in several parts of Argentina, including Buenos Aires, has highlighted how the events of late 2001, which ended up in the Argentine "default "of foreign debt, still strongly influence political debate in the country. And not just at a rhetorical level. To have resisted the prescriptions of the Washington Consensus, defied the IMF and sought an alternative economic course is a mixture of patriotic bravery, political determination and resilience that has given meaning and direction to the national epic throughout these years.

A typical feature which tends to repeat itself regularly in Latin American politics is that none of the candidates concede an inch of defeat on election night. According to each candidate’s interpretation and given the percentages obtained, everybody wins. So, on July 5, the candidates made as much as they could of their own results which sparked lively debates among television analysts, regardless of the ideological colour of the channel broadcasting election specials. After the huge disappointment at the defeat – in this case quite undeniable – of the Argentinian soccer national team in the Copa América final the night before, la veda (the ban, currently in force in Argentina, on selling alcoholic beverages on the eve of elections and right until after the publication of the results) had to be endured while enthusiastically playing the other favourite national sport: political controversy.

In the autonomous city of Buenos Aires, three candidates were fighting for the mayorship, and the vast majority of surveys, with a three-point margin of error, correctly predicted the result -  which is something that did not happen at all in Greece, where no one anticipated a 20-point difference for NO. The Conservative Propuesta Republicana (PRO - Republican Proposal) candidate Horacio Rodríguez Larreta won with nearly 47.5% of the vote, followed by the progressive, young ECO coalition candidate, Martín Lousteau, with 22,25%. The official Kirschnerista candidate, Mariano Recalde, came third (18.72%), even though he had earned his promotion and the support from the La Cámpora movement and from President Cristina Fernández de Kirchner herself, thanks to the credit won for having "refloated" the national flag carrier, Aerolíneas Argentinas, at an estimated cost of some US$2,000 million - over 20,000 million Argentine pesos at the official exchange rate.

The airline had been sold during the privatization wave of the 90s and its new owners, looking for short-term profits, had neglected the necessary – and very expensive -technological upgrade of the aircraft. Disinvestment occurred to such an extent that it eventually led to a crisis that compromised air safety and airport radars, had a negative impact on tourism, and finally led to the re-nationalization of the company in 2008. As described by Professor Michael Cohen from the New School in his book "The Economy in Times of Default" (Palgrave Macmillan 2012, Spanish version EUDEBA 2015), the case became emblematic for it proved the perversity of arbitrary downsizing policies and speculative market management, and served to show the determination of the Argentine government to restore national pride and the viability of national institutions. In the middle of the long campaign for the local and regional elections, which are seen as primaries for the presidential elections scheduled in October, public television endlessly repeated to the huge audiences attracted by the Copa América matches, a TV commercial praising the current state of Aerolíneas Argentinas: a thinly veiled campaign for candidate Recalde.

The fact that Larreta, the current mayor and perennial favorite, did not get over 50% of the vote, as some had been predicting, had at least two consequences: it forced a runoff (“ballotage” in local terminology) for July 19 and it gave the opposition the opportunity to say that he scored lower than expected and that this has left him weakened. The euphoria at the headquarters of the PRO, where spectacular dance steps featuring the Larreta team were led by an ecstatic Claudio Macri, the opposition candidate at the November presidential elections, clearly indicated otherwise. Despite the choreographed and somewhat pushy performance, it did manage to convey humour and success to enthusiastic followers in a true American-style mise-en-scène.

In Lousteau’s camp, where the leader is a young man who, despite the fact that during the campaign he appeared sometimes to be lacking in gravitas in some respects, definitely seems to have a political career ahead of him, the spirits were also high for two reasons: they had won a good second place in the race, and they had clearly beaten the official candidate Recalde - so that it will be Lousteau and not Recalde who will face Larreta in the ballotage. This will mean substantial overtime media exposure for him in the two-week campaign leading to July 19. With his uncombed hairstyle and his intellectual and very porteño air, Lousteau could do well in the second round.

But the most proactive triumphalism came from Recalde’s Frente para la Victoria (FPV - Front for Victory) camp. Recalde performed without much conviction the rhetorical pirouette which consisted in saying that the results confirmed the prognosis of a Kirchnerista victory at the forthcoming presidential elections, where the candidate nominated by the President, amid a heated controversy among Peronists, is Daniel Scioli. Scioli was not, however, in Buenos Aires alongside Recalde, but was shown attending the media in the northern province of La Rioja, where the FPV candidate had won a clear victory and was returned to office as governor. Where Recalde was seen smiling more broadly (surrounded by the stern faces of his collaborators) was next to the popular, although according to many far too arrogant young Finance Minister Daniel Kichilof, the rising star of Kirschnerism, who happily joined the celebrations simultaneously taking place in Athens, arguing that they came once again to prove the victory of the "people" and "democracy" against the forces of neoliberal external creditors - as happened in Argentina years ago. To reaffirm the correctness of President Nestor Kirchner's judgement in 2002 is indeed important for the Kirschnerista epic at a moment of self-doubt, and to warmly congratulate the Greeks for their courage, determination, dignity and pride is to express the values ​​that the Front for Victory’s political project still aims to embody.

The allusions to Greece were not, in any case, improvised, and were very much present in the final stretch of the campaign, especially following the announcement en catastrophe of the referendum on the extremely harsh conditions presented by creditors to Prime Minister Alexis Tsipras. Indeed, much of the political capital of Kirschnerism stems from the determination it showed in countering the champions of  the Washington Consensus, led by the IMF. The enforcement of neo-conservative policy prescriptions by the Argentine governments of the 90s proved in the end disastrous and brought a fist down on the creditors’ table in the form of a declaration of adefault on the debt – which was something unprecedented in the western world and whose consequences were unpredictable. Even today, more than 12 years later, there are still unresolved issues relating to vulture funds, the lack of reliable economic indicators, and the blue dollar.

At the time, a great chorus of outraged voices were heard, saying that having expelled itself from the international capital markets, Argentina would be non-viable and that the dire consequences of such a decision would very soon become apparent. To the astonishment of many, however, the following years came to prove the feasibility of social reinvestment policies, and the strengthening of the economy through strong state intervention to ensure the redistribution of wealth and job creation in a country with sufficient resources - particularly its huge soybean, vegetable oil and cereals production capacity. A global context of rising prices of these products in 2000, and a demand driven by the steady double-digit growth of China helped to make the economic and social miracle of the Nestor Kirchner years possible.

Transposing the Argentine case of more than a decade ago to the debt crisis in Europe and the policies of austerity and hard fiscal adjustment in the context of an extremely complex European project of unification and in the face of serious internal imbalances, is not straightforward and it can lead to demagogy. The ideological background, which is actually what motivates the applause for Athens from Buenos Aires, is clear: neo-liberalism, which was the one and only prescription written after the end of the Cold War euphoria, during the so-called 'unipolar moment', created havoc in the economies of developing countries where unemployment and increasing debt forced a reaction not only from Argentina, but from most Latin American countries (between 2002 and 2012, 11 of the 14 countries in the region elected progressive governments ). The volatility of the financial markets had a strong impact on Mexico in 1997, then on the Asian tigers, on Russia and finally on Brazil. It ended up hitting Argentina hard.

But in Europe it was the Great Recession, beginning in 2008, which highlighted the structural weaknesses and, above all, the problems of the economies of the South, which had climbed onto the neoliberal wave of government downsizing, rapid growth based on excessive debt and, in some conspicuous cases like Spain, risky real estate speculation in the absence of the slightest safety nets. Today Greece carries the weight of systemic problems which are difficult to solve, but although it rightly stands up against the hardest parts of the adjustment policies, with its citizens exhausted and an insolvent banking system, there seems to be no alternative to a major restructuring of the debt, the cost of which should be borne jointly by the European Central Bank and the countries mostly exposed. But all this will be useless talk if a solution is not found, through the development of alternative policies, to revive the Greek economy and re-start the now seized engine of growth.

Argentina was lucky to be peripheral and not, as Greece is, in the thick of the European storm, surrounded by difficult actors such as the Balkans, Russia, Turkey and the Middle East in turmoil. Argentina also had the advantage of being a very large and fertile country, with huge natural resources and a very able population, though hardened by the blows of recurrent economic and political crises - including the ruthless and bloody military dictatorship (1976-1983) that decimated (more than 30,000 dead and missing) a vibrant sector of the population, with a huge potential for innovation and for generating new ideas and models.

To the observer of the political debate in both countries, the existence of multiple parallels is obvious. The passion with which the taxi driver and the minister, the concierge and the president discuss politics, is similar. But there is a very substantial difference: whereas wealth in Argentina comes from the country itself and its ability to manage it efficiently and sustainably, Greece has no natural resources to exploit and commercialize in the global commodities market and has little macroeconomic room for manoeuvre either inside or outside the EU. The country will need European solidarity in order to exit the dark period it has been pushed into by all the players involved.

Argentina, located in the South of the South, with its vast prairies, plentiful water in its mountain ranges and glaciers, and substantial energy reserves in its subsoil, can adapt to the circumstances of the global economy by undertaking some smart and sustainable policies in a region bursting with potential. Greece, the ancestral nucleus of the Mediterranean, the cradle of reason and the idea of democracy, is an arid and mountainous land, fragmented into myriad islands that offer tourism and little else. It requires readjustment to the European environment because, without it, it would be left with only Russian Orthodox money injected through a future pipeline, or the easy money of Chinese logistics, the medium-term impact of which is difficult to ascertain. Better perhaps to stick to its founding myths, which happen to be also those of Old Europe.

At the end of the day, the new left prefers the open platforms of political participation and it might hopefully learn to turn this enthusiasm into public policies geared to regeneration, institutionalization and change - as Argentina did over ten years ago, even though, as Kirschnerism shows signs of exhaustion, the country now needs to reinvent itself.

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