By Jude Webber in Buenos Aires
Published: April 25 2011 21:17
Cristina Fernández, Argentina’s president, never seems happier than when she is fighting.
After battles with the powerful farm sector, the central bank and a top media group, plus a tough stance with the International Monetary Fund and western creditors, not to mention a recent diplomatic skirmish with Washington, her latest target is an icon of capitalism – the Techint conglomerate, whose Siderar unit is the company’s biggest steelmaker.
But her use of an emergency decree last week to boost the government’s influence on several company boards, including that of Siderar, is not seen as an attempt at nationalisation by the back door, even though Techint claims it is state interference worthy of Hugo Chávez, the Venezuelan president.
“I don’t see this as any Venezuelan-style process,” says Carlos Germano, a political analyst. “That isn’t her style. But this government believes in the strategy of having friends and enemies – it’s in the government’s DNA, especially in an election year.”
Ms Fernández has yet to confirm what is widely expected – that she will stand for a second term in the October vote. Opinion polls show her far ahead of the opposition and the government is keen to encourage the perception that she has already won.
Thus the fight with Siderar – which is degenerating into lawsuits on both sides – is “a heavyweight combat to show she is not afraid of anybody”, Mr Germano says.
The dispute erupted after Ms Fernández issued an emergency decree two days before the company’s annual meeting, overturning a 5 per cent cap on the voting rights of the state pensions agency, Anses, in private companies. The agency has almost 26 per cent of Siderar.
Anses sought at the meeting to increase the number of board members and voted against a 1.5bn peso ($368m) dividend payment, the biggest in the company’s history. The stock market regulator declared the meeting void, leaving the dividend in limbo. Siderar hit back with legal action, and the government is also preparing a lawsuit.
Though the Siderar battle is mainly for domestic consumption, it is likely to concern investors who may be eyeing Argentina, lured by strong economic growth despite high inflation and unreliable state statistics.
“Changing the rules of the game from one day to the next does have a negative effect,” says Daniel Kerner, an analyst at Eurasia, a consultancy. But Amado Boudou, economy minister, says the government is seeking “no more nor less than our due”.
Besides the Siderar battle, Ms Fernández engages in constant confrontation with media group Clarín, owner of the country’s top-selling daily, which is implacably hostile to her. Last year she accused Clarín on national television of colluding with the military dictatorship more than 30 years ago to force the sale of a newsprint company.
Early in her presidency, Ms Fernández took on the farm sector, the backbone of the Argentine economy, and tried to raise export tariffs. She was finally forced into a climbdown.
Undeterred, she threw herself last year into a battle with the central bank after its then president objected to her use of an emergency decree to use reserves to pay off debt. After long legal challenges she got her way.
The government believes hardball tactics get the best for Argentina. Blaming the IMF for prescribing policies that led the country into a ruinous $100bn default in 2001, Ms Fernández’s husband and predecessor paid Argentina’s $10bn debts to the lender in 2006, and the country has refused surveillance by the IMF ever since.
Ms Fernández presided over a tough restructuring last year of defaulted debt and is pushing to renegotiate its $7bn arrears with western creditors.
In a bizarre incident this year, which smacked of anger that Argentina was left off Barack Obama’s Latin American tour, she also accused the US of trying to smuggle arms and other items on a plane carrying material for a police training course.
Mr Germano sees no change in her “friends versus foes” mentality. “She’s going to continue like this, as long as the government ‘model’ can stand it,” he says. “Unfortunately, Argentina’s history is to continue repeating its mistakes.”
Copyright The Financial Times Limited 2011.
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