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After the farms, the markets set another limit to the K administration
September 3, 2008
The golden sector of the Argentine administration (Sergio Massa-Martín Redrado) finally decided to pay the debt to the Club of Paris. Cristina was applauded by the industrial establishment that came together at Casa Rosada as when Néstor announced to pay cash to the IMF in 2005.
By Pablo Díaz de Brito

The golden sector of the Argentine administration (Sergio Massa-Martín Redrado) finally decided to pay the debt to the Club of Paris. Cristina was applauded by the industrial establishment that came together at Casa Rosada as when Néstor announced to pay cash to the IMF in 2005. But the parallel is deceiptful: The latter was a demonstration of Néstor's power, then extraordinarily strong, with the productive model as an engine and in his best moment. Néstor showed his muscles and sent the message: We grow 9 % per year and we don't need you, neither you, nor your Wall Street and market friends. Now, the cash payment is carried out in adverse circumstances, that the hated markets dramatized as a murmur of a default risk. Now the market will be able to say: We bothered them for some weeks and, out of emergency, the government had to come up with this payment to the central countries to get out of the financial isolation. And it will be, right, the "market".

One of the pillars of the K supporters that is highest assessed at an ideological and emotional level, the independence of the financial centers, finished or is finishing. With her announcement, Cristina told those spheres of international power that she needs them, or that very soon she will need them. Because Argentina can't go on with the slogan of Aldo Ferrer anymore. It won't be able to "grow with our own" in 2009, not even at a lot more moderate rates (4 - 6 %).

Another point for the markets: The protagonistic role that Redrado won, a virtual minister in the informal financial table that he forms together with the "under-minister" Carlos Fernández, Massa and the financial secretary, Lorenzino. Like this, the two golden boys of Cristina take away a sizeable proportion of the political initiative in the alleged "new stage" of the administration. Those aren't very good news for the penguin-gurka (Moreno, De Vido, Parrilli, D'Elia, etc) sector.

Apart from those internal issues, what counts is once again a foreign fact, a hated actor, who bothered the K power and dictated them a change of agenda. Already some weeks passed since the markets, the financial world, was putting a yellow light on K actions and finally the latter accepted this call of attention, or, better, the pure and simple reality. The reality is that they live in an economic system that is hyperinternationalized and that growing with our own was possible during almost a five-year-period thanks to the incredible combination of  favorable factors that gave Néstor the already mentioned tailwind which he enjoyed during his presidency. And the reality is that it's not possible to continue with this isolatic recipe anymore.