Coffee House

The US has taken a stance against Argentina’s brinkmanship — it’s time we joined them

8 May 2012

4:48 PM

8 May 2012

4:48 PM

The 30th anniversary of the Falklands War – and the bellicose
rhetoric (and videos) currently emerging from Buenos Aires — has once more shone a spotlight on the UK’s relationship with Argentina. Were it
not for the Falklands, it’s unlikely that Argentina would occupy much discussion in this country. The truth, for those of us who have followed the country’s recent history, is that
Argentina, most notably under the current Government, is truly remarkable. But for all the wrong reasons.

In Britain, of course, our chief concern is the ongoing nationalist rhetoric that President Cristina Kirchner is whipping up around the sovereignty of the Falkland Islands. But if you were Spanish,
your chief concern would be that Kirchner has just filed a Bill to nationalise part of a major Spanish energy company, YPF/Repsol, which would mean losses of billions of Euros for Spanish
investors. Months of government intimidation has already lost the company several operating licences in Argentina, and significantly depressed its share price. If you were Italian or American,
however, your chief concern would be that Argentina is refusing to pay debts following her default in 2001. This amounts to billions of dollars owed to financial institutions, pension funds, and
200,000 individual pensioners in Italy, whose savings have been eradicated by Kirchner’s refusal to honour the contracts. Countless other creditors from countries around the world are also
owed money. Argentina meanwhile has amassed over £30 billion in foreign currency reserves — enough to pay her debts to both private bondholders and Governments, and still have plenty of
change.

President Kirchner’s intransigence does not stop there. Argentina was in non-compliance with 47 of 49 of the international recommendations on anti-terrorist financing and anti-money
laundering, as measured by the Financial Action Task Force (FATF) in 2010; she has ignored 116 court judgments on debt repayment in New York alone; and is the subject of 80 per cent of cases
against G20 countries in ICSID, the World Bank’s tribunal body. Kirchner even refuses to abide by her IMF Article IV obligations (allowing oversight of a country’s finances), which
every other country in the IMF allows as a matter of course. It is due to this defiant behaviour Argentina displays at every turn that many are now calling for the country to be expelled from the
G20.

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Argentina has a Government with a staggering disregard for the rules that everyone else abides by. Yet she continues to benefit from billions of pounds of loans from the same international
institutions, such as the World Bank, that she treats with such disrespect.

But this is changing. The United States is leading efforts to hit the Kirchner Government where it hurts – in the wallet. Since September 2011, the U.S. Government has voted against loans
from international lending institutions to Argentina, a hugely important step towards protecting the integrity of the international lending system. Now, according to reports, Spain plans to join
the U.S. in opposing multi-lateral development loans to Argentina.

British taxpayers have supported the World Bank and other multilateral lending institutions to the tune of £4.6 billion since 1999 — perhaps it’s time we too stood up against this
abuse of the system we support so generously?

If Argentina refuses to abide by the rulings of the World Bank, why should they be able to be allowed to benefit from that institution? The principle outlined by the US is one that we, as
significant players in international aid, should wholeheartedly support, yet since September 2011 the UK representatives have continued to nod through these loans to Argentina. The time has come
for a rethink — we should stand alongside the US by denying loans to Argentina until she agrees to live up to her obligations. The Government has made a start — with the recent
announcement that Argentina should pay back £45 million in pre-1982 loans that were used for military expenditure — but the wider issue still demands attention.

The current Argentinian Government is a danger to its own people (capital flight amounted to over £15 billion in 2011), to the safety and prosperity of the Falkland Islands, and to the
international economy. We should not allow Cristina Kirchner’s sabre-rattling over the Falklands to distract us from acting against this irresponsible behaviour. By voting against these
loans, we can get better value for our taxpayer money, we can protect the international lending system, and we can send a message that a G20 country with no respect for domestic or international
laws cannot be tolerated. The next time a loan is proposed at the Inter-American Development Bank or World Bank, we have a choice: to nod through further funds for the outlaws in Buenos Aires, or
to stand alongside the U.S. in principled opposition. I sincerely hope the Government chooses the latter.

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Show comments
  • Falklander

    Joseph
    Typical Argentine changing of figures. In the 1830’s there were less than 30 Argentines here and when asked by Britain what they wanted to do 26 wanted to stay and 4 left

    • KB

      “26 wanted to stay”

  • Nigel Smith

    >joseph – I don’t know which history books you’ve been reading, but it’s obviously the propaganda that was generated in the Casa Rosada. You ought to check the facts before you make such a historically inaccurate statement.

    The population of the Louis Vernet settlement founded in 1828 numbered only 70 people at its highest number.

    Of that number, 46 inhabitants left with the USS Lexington after the raid in 1831 – far more than left in 1833. Composed of:

    26 settlers
    13 slaves
    7 prisoners

    In 1833 there were 33 genuine residents. Of these, 11 decided to leave of their own free will, even though the British tried to persuade them to stay.

    The ones that left were 2 of Vernet’s gauchos:

    Joaqu

  • Nigel Smith

    Argentina simply has to put any territorial claims on the Falklands out of their mind. As for their claims on South Georgia and the South Sandwich Islands (and South Orkneys), well these are simply insane. They claim these ‘Geographically’, yet South Georgia is further away from Argentina as London is from Casablanca. As for the South Sandwich Islands, they are further away than London is from Istanbul. By Argentine logic, The United States would own all of Canada, Mexico and most of Central America too!

    Britain will respect the wishes of the Falkland Islanders and defend them with all our might, just as we defended Belgium in 1914 and Poland in 1939. If Argentina does not comprehend what this means and make the same mistakes again, they will learn some very expensive lessons.

  • Nigel Smith

    >John Jefferson Burns
    A charm offensive is not required. The mad woman in the Casa Rosada has pressed the ‘self-destruct’ button with her nationalization of YPF. In one fell swoop, she lost the only friend she had in Europe and any support she might have expected from the EU or IMF. Moreover, as with Chavez, local oil production will go down, whilst oil imports will go through the roof. No international oil company will invest in Argentine oil fields when there is a very real chance that you will lose your investment. Let alone the legal problems of dealing with a Repsol claim against them for their stolen assets. I predict there will be Gasoline shortages and rationing in Buenos Aires in the not too distant future.

    Argentina is also annoying her neighbours. Trade barriers and failure to pay debts will eventually see Argentina losing any Mercosur support for political matters like the Falklands. Argentina is expansionist just as Germany was pre-WW2. It was recently pointed out that Chile was threatened in the 80s. Just like Nazi-Germany, there’s a dictator with a screw loose in power.

    As for the Falklands, South America fails to comprehend that Britain would go to any length (and I mean ANY length) to defend the rights of Self-Determination as embodied in Article 1 of the UN Charter. America has gone to war for the same reasons and believes in the same liberties. The United States did assist Great Britain in 1982, just as the Soviets helped Argentina. If Argentina was foolish enough to start another war, then Britain might demand NATO assistance to remove them. If help was conditional (on talks) when the Islanders do not want this, then the United Kingdom would go it alone. This would not be a problem for a nuclear state with access to both cruise missiles and SLBM. Tactical strikes would remove the problem quite promptly.

    The answer to the conundrum may be for the Falkland islands to declare independence from the UK. As a new nation (and an english speaking oil nation in the Americas) I’m sure the United States would welcome them to the UN. It would be awfully difficult for Argentina to then invade an independent country. In many ways, it would be similar to Belize being claimed by Guatemala, but having its independence guaranteed by other powers.

  • joseph

    Self determination isn’t an argument for the UK since they in the 1830’s sent the 3000 or so Argentineans inhabitants of the islands back to Argentina via Uruguay.
    In the next 180 years could not even populate the islands to surpass significantly the same 1830’s levels of the Argentinean population.

  • ZooMatt

    What unfortunate how that horrified eyes look at those “authoritarian attitudes” in developing countries. But when these attitudes come from developed countries against weaker ones, everything is permitted. Right?!. We’ll see what you think about China when it starts to play with their own rules. Rules that have nothing to do with the Western world and surely everyone should be able to accept without protest. Open your eyes, Argentina is not dangerous at all, except for itself. The real enemy is gaining weight rapidly and no one can stop it. Poor rich kids once. We, like all in Latin America, have grown up under the “civilized” and “correct” world you own, and certainly are used to. But what about you?! I hope you have the guts to accept your future reality. And I hope I’m wrong too. For the good of humankind. Sorry for sound so apocalyptic.

  • Nigel Smith

    >John Jefferson Burns
    A charm offensive is not required. The mad woman in the Casa Rosada has pressed the ‘self-destruct’ button with her nationalisation of YPF. In one fell swoop, she lost the only friend she had in Europe and any support she might have expected from the EU or IMF. Moreover, as with Chavez, local oil production will go down, whilst oil imports will go through the roof. No international oil company will invest in Argentine oil fields when there is a very real chance that you will lose your investment. Let alone the legal problems of dealing with a Repsol claim against them for their stolen assets. I predict there will be Gasoline shortages and rationing in Buenos Aires in the not too distant future.

    Argentina is also annoying her neighbours. Trade barriers and failure to pay debts will eventually see Argentina losing any Mercosur support for political matters like the Falklands. Argentina is expansionist just as Germany was pre-WW2. It was recently pointed out that Chile was threatened in the 80s. Just like Nazi-Germany, there’s a dictator with a screw loose in power.

    As for the Falklands, South America fails to comprehend that Britain would go to any length (and I mean ANY length) to defend the rights of Self-Determination as embodied in Article 1 of the UN Charter. America has gone to war for the same reasons and believes in the same liberties. The United States did assist Great Britain in 1982, just as the Soviets helped Argentina. If Argentina was foolish enough to start another war, then Britain might demand NATO assistance to remove them. If help was conditional (on talks) when the Islanders do not want this, then the United Kingdom would go it alone. This would not be a problem for a nuclear state with access to both cruise missiles and SLBM. Tactical strikes would remove the problem quite promptly.

    The answer to the conundrum may be for the Falkland islands to declare independence from the UK. As a new nation (and an english speaking oil nation in the Americas) I’m sure the United States would welcome them to the UN. It would be awfully difficult for Argentina to then invade an independent country. In many ways, it would be similar to Belize being claimed by Guatemala, but having its independence guaranteed by other powers.

    Argentina simply has to put any territorial claims on the Falklands out of their mind. As for their claims on South Georgia and the South Sandwich Islands (and South Orkneys), well these are simply insane. They claim these ‘Geographically’, yet South Georgia is further away from Argentina as London is from Casablanca. As for the South Sandwich Islands, they are further away than London is from Istanbul. By Argentine logic, The United States would own all of Canada, Mexico and most of Central America too!

    Britain will respect the wishes of the Falkland Islanders and defend them with all our might, just as we defended Belgium in 1914 and Poland in 1939. If Argentina does not comprehend what this means and make the same mistakes again, they will learn some very expensive lessons.

  • Tom Pride

    John.
    May 9th, 2012 9:20pm

    May I add to your list, France and Saint Pierre and Miquelon (between Newfoundland and Nova Scotia).

  • John.

    John Jefferson Burns: Can you tell me what the difference between France holding onto Guadaloupe and Martinique, Holland holding onto Aruba and Cura

  • Alistair Morley

    John Hall,

    There are exceptions to the “no 2 democracys have ever gone to war.” statement, but it remains almost a law of international relations. It cannot be so tritely dismissed.

    Democracy-democracy conflicts are so rare in human history as to be negligible, and are dwarfed by other dyads. Statistically, democracy-democracy dyads is a huge predictor of non-conflict, and dwarfs all other factors in the literature. Note the few arguable cases (like UK-Finland 40) are also notable for being very low casualty rates compared to other conflicts.

  • jerry2000

    Another stupid commentary by a corrupt tory government.
    Jsut concentrate in the trillion pound public debt,the 9 trillion foreign debt,and the 3 millions unemployed in uk…
    USA support Argentina on the falklands
    The US would support an Argentine “accommodation” as its national interest supports stability in the area. “This tells us all too clearly which way the wind is blowing.” The Organization of American States, a talking shop for north and south American countries, last week adopted a declaration calling for negotiations between Britain and Argentina over the “sovereignty” of the Falkland Islands.

    http://www.telegraph.co.uk/news/worldnews/southamerica/falklandislands/8571442/Britain-can-do-nothing-to-prevent-Argentina-retaking-Falkland-Islands.html

  • John Jefferson Burns

    @Nigel Smith: Thankyou for that. I had always wondered why Reagan supported the war. Popular supposition in New York related it to his flirting with Margaret Thatcher.
    Problem now still however is the perception of the old European colonialist powers throughout the Americas.
    The Brits need a major charm offensive.

  • TomTom

    “He never applied the Munro doctrine in 1833”

    The Monroe Doctrine was enforced by the Royal Navy as the US didn’t have one. It served British interests to keep Spain out of South America when Canning instigated revolutions across South America.

    The Monroe Doctrine served British interests in developing Chile and Monte Video and Brazil as British trading partners – a policy where Britain also encouraged Texas to stay out of The Union until 1846

  • John Hall

    btw I think you’ll find the doctrine was named after James Monroe

  • John Hall

    This is why Tony Blair should stop justifying regime change in Iraq on the basis that “no two democracies have gone to war”.

    BUT they have. Finland and Britain from 1941-44. NEXT!

  • Nigel Smith

    >John Jefferson Burns
    America did not forget Munro. Andrew Jackson was president when Britain re-established sovereignty over the Falklands. Jackson really hated the British (post 1812), but he hated the Argentines more for pirating US ships. He never applied the Munro doctrine in 1833, because he regarded the Falklands as British territory. If he had considered it Argentine, he would have been forced to pay compensation for the USS Lexington raid on the Argentine settlement in 1831. The British took care of a problem for Jackson. He wanted American whaling ships to have the freedom of the seas around the Falklands and whilst the Falklands were British, he was assured of this. The United States not only agreed with the British takeover in 1833, they supported it. If they ever supported Argentina’s position with regards to sovereignty, then the US President would be laying America open to a compensation bill that by now would be in the Trillions of dollars.

  • Cynic

    Is there any fund to which we don’t contribute lots of dosh we don’t have?

  • Charles

    It’s not just Kirchner though.

    Argentina is a case study of how politicians can destroy a country.

    In the 1900s, Argentina had a higher per capita income than most of Europe, was a top emerging market and had plenty of UK (investor) funded infrastructure. Just look at it now.

  • Yow Min Lye

    And the Argentines scratch their heads and wonder why the Falkland Islanders desperately do not want to be a part of this failed banana republic.

  • Peter Jackson

    @victor Jara 67

    They’ll be rationing hair oil soon Victor. Better stock up

  • Dimoto

    Even according to the CIA ‘funny numbers’, Argentina is number 22 in the world ranking of GDP (more realistically it’s probably in the 30s with Belgium and Malaysia), and is the best example of an “undeveloping” country (maybe, in common with the UK !)

    God only knows why this chronically underachieving country should be invited to be part of the “magnificent G-20”.

    But not to worry, another Peronist bankruptcy is well on the way.

    Will they then learn a lesson and vote in a relatively honest, effective government ?

    In a word – NO !

  • Mr Danger

    Nationalising YPF marked pretty much the end of the road for Argentina. Its a long slow death but it is inevitable.

  • EC

    Yes I agree, strapworld. It’s time the likes of Brady stood up to be counted. I wonder if Mr Brady, Spectator “Backbencher of the Year” Dec 2010, has any news of Julian Lewis MP (New Forest East) ?

    Julian has been MP for New Forest East since 1997.
    On 6 May 2010, he was re-elected with a majority of 11,307.

    Quoting Dave:

    “Julian Lewis has a formidable reputation in the field of defence and disarmament. He led the challenge to dangerous unilateralism in the Eighties, and was proved right on this crucial issue. Julian is held in very high regard by defence experts and has brought this real experience and expertise to my Front Bench team.”
    Rt Hon David Cameron MP
    February 2010″

    … but WHERE is Julian now, post Coalition May 2010? Either went to the wrong school(*), too Conservative or was far far too competent for the likes of Dave. (*) – same school as Rowan Williams, actually.

    Talking of competence, my MP is Jeremy Hunt.

  • Kevin

    “Cristina Kirchner’s sabre-rattling over the Falklands”

    This is why Tony Blair should stop justifying regime change in Iraq on the basis that “no two democracies have gone to war”. (Not that justifying a war on the basis that war is an evil to be avoided ever made sense.)

  • victor jara 67

    With your empire tumbling down let nobody back your crown Las Islas Malvinas Argentina!

  • Olaf from Norway

    ” In Britain, of course, our concern is the ongoing nationalist rhetoric that President Kirchner is whipping up around the sovereignty of the Falkland islands.” And of course, has nothing to do what so ever with the fact that the Falkland islands has got £200 billion barrels worth of oil.

  • TomTom

    Argentina was once a very rich country until the Peronistas started to destroy Law and Kirchner and her late husband were both Peronistas. It would be superb if Argentina could be stabilised so we could all emigrate there for better weather.

    Why does modern Britain have so much less interest in South America than the Germans ?

  • Widmerpool

    A good piece which told me a lot I did not know already. Our American Cousins are to be applauded for playing hard ball with what seems to be a hooligan state. Maybe they should be put on the same bad boy list as North Korea and Iran although thank God I don’t think the Argies have nukes!

  • Robert Eve

    The key question regarding Argentina is whether their rugby team will be able to compete with NZ, OZ & SA in the new 4 Nations competition later this summer.

  • BlueonRed

    Everyone should stop buying their dreadful wine also. Maybe boycott their beef too although that would be a greater sacrifice!

  • John Jefferson Burns

    All rulers in trouble focus on the external enemies. Kirchner is no diffent to Galtieri.
    Looked at however from the disinterested South American point of view the Spanish divested their colonies while the Brits hung on to the Malvinas.
    I guess it is fortunate that Washington has forgotten Munro.

  • Kevin Richardson

    We should be in a full out trade war with Argentina after they are campaigning to get our ships blocked from South American ports! Every possible hindrance, economic and diplomatic must be brought upon this offensive regime!

  • Noa.

    You are correct Mr Brady, we should not be ‘lending’ or granting borrowed money to Argentina whilst she acts in a hostile and provocative manner towards us.

    But why do you feel we need to follow the US example in this matter rather than simply so acting in our own right?

  • strapworld

    Goodness me Mr Brady, you ARE alive. Whilst I agree with every word you write here. I would have greatly welcomed your critique of Cameron/Clegg, the recent elections and the gift those two have handed the Labour Party. It would also be interesting to learn how you are going to counter the A listers who are determined to shut the 1922 committee up!

    Great to know you are still around.

  • salieri

    A good start would be to deny entry to all their Olympic athletes and officials. Failing that, to have a special Border Agency queue at Heathrow for Argentina only, with no-one manning it.

  • Vulture

    Mr Brady, why are you wasting your time writing this? The Argies are not going to invade the Falklands. They haven’t the capacity.

    As Chairman of the 1922 Committee wouldn’t your time be more usefully spent in gathering the 46 Tory MPs’ signatures you need to trigger a no confidence vote in the disastrous David Cameron, who is leading your party and our country to electoral Armageddon.

    Forget the Falklands: that’s the battle you should be fighting.

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