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Cristina faced pickets and marches
Ambito Financiero
September 27, 2007

The bondholders that fell outside the debt swap received Nestor Kirchner with an advertisement in the Wall Street Journal. They recorded there that the culture of Argentine corruption cost Americans millions; they also mentioned the default and the case of the Venezuelan valise. The Kirchner presidency is reaching its end , it says, and ask his successor to do her job and pay for the party.

NEW YORK It was inevitable that the pressure from the bondholders that didn't enter the swap would be felt on this tour by the presidential couple in this city. A colorful demonstration, with "extras" dressed as teachers in violet tunics in the heart of Manhattan, demanded a solution yesterday for the debt that remains in default. "Argentina, win respect and pay the debt", "Stop the Argentine culture of corruption" and "Cristina, negotiate with the bondholders" were some of the signs that were held up yesterday at noon. The "scene setter" happened on the corner of Park Avenue and 48th Street, one and a half blocks from the Waldorf Astoria. It coincided, of course, with Cristina's presence at that hotel, where the lunch was being held with investors organized by the Council of the Americas. "It was the closest that the police allowed us to express ourselves. It's been over a week that we've been asking for permission," said one of the organizers.

The characterization of the demonstrators as teachers was not chosen at random. Many U.S. pension funds that are made up of teachers invested in Argentine bonds before the cessation of payments. This situation generated great damage, which persist due to the refused of many of these funds to accept the proposed payoff by the government. It is estimated that more than $20 billion didn't enter the swap, with $3 billion in American hands.

It was all put together by the American Task Force Argentina (ATFA), an entity that joins U.S. investors that hold titles that didn't enter the swap. The ex-U.S. subsecretary of Commerce, Robert Shapiro, and the ex-ambassador Nancy Soderberg are the visible faces of the organization.

The action yesterday in this city proceeded the publication of a strong ad from the same group in the "Wall Street Journal." The title says it all: "The culture of corruption is costing Americans billions." "The presidency of Nestor Kirchner," it continued, "is reaching its end, leaving behind a legacy of mismanagement and corruption." And it pointed out that the possible new president has in front of her a great opportunity to "clean up the mess". Also, it recalls the recent episode of the valise that sought to enter the country with Venezuelan Antonini Wilson with $800,000 as a sign of the less transparent management of the current administration.

In her speech to investors, Cristina touched only tangentially on the issue and didn't give too much much ground for the favorable expectations: "This government did the restructuring and we took a debt of 160% in relation to GDP to only 60% now." She avoided mentioning, of course, that the calculation didn't include the large number of titles that fell outside the restructuring.

In reality, there are every day more people on Wall Street that believe the first lady will give a new chance to the bondholders who didn't enter the swap. But everything will be left, it is speculated, until Argentina closes the negotiation of the debt with the Paris Club.

Shapiro, representing the U.S. creditors, has already contacted the main countries that are creditors of Argentina through the Paris Club. He asked them to demand an exit by the government for the debt in default with the bondholders as a condition for sitting down to negotiate the new terms and rates.