20/11/2008 04:21
Buenos Aires Herald - Nota - Editorial - Pág.10
Air raid

Argentina now stands on the brink of a diplomatically and fiscally reckless expropriation of Aerolineas Argentinas after a bicameral Congress committee decided on Tuesday that the loss-making airline is worth no more than a peso. The expropriation has still to be approved by both Houses of Congress (who voted last September to renationalize the airline following an agreement with the outgoing Spanish Marsans owners which was never going to happen but expropriation is a different proposition) yet this can he assumed to be a mere formality. On paper at least the seizure of Aerolineas and Austral airlines is very much a parliamentary initiative because the executive branch (in the persons of President Cristina Fernandez de Kirchner and Federal Planning Minister Julio De Vido) is still formally committed to purchase over expropriation - even if one peso is formally a purchase (why not be generous and offer two pesos, given that coins are so hard to come by?). This parliamentary expropriation thus enables the administration to have it both ways - a high-profile nationalization plus the institutional improvement promised in CFK's presidential campaign. Yet how can acquiring an epic loss-maker be described as a victory (especially when the expropriation draft bill enjoins the State to guarantee services)? If the government's handling of this expropriation can be considered rash, the opposition's performance has hardly been better - indeed many of their statements accomplish the remarkable achievement of being more populist and demagogic than anything emanating from the CFK administration. For example, the absurdly simplistic proposal by both centre-right PRO and Radical deputies that only Aerolineas assets should be expropriated but not the liabilities - this would be tantamount to running an airline without aircraft since virtually the entire Aerolineas fleet is leased. The opposition has also missed an opportu- . nity to be the third party between an official negative valuation of up to 832 million dollars and a purchase price of at least 330 million dollars sought by Marsans (after a capital injection of 100 million pesos) - a more impartial opinion which is lacking from any other source. Opposition politicians further missed an opportunity to dispute the government's boast that the airline's short-term debt has been halved under the recent state trusteeship - might this not be consequence of the state magically ceasing to be the main problem (in the form of encouraging fractious state unionism and freezing fares) and lower global fuel prices rather than miraculously improved stewardship? Last and perhaps least (especially when compared to the fiscal cancer which Aerolineas will now represent) is the effect on the relationship with Spain, recently antagonized by the shattering effect of Argentina's drive to eliminate private pension funds on the Madrid stock exchange among other clashes. So much so that victory in the Davis Cup tennis final starting tomorrow could prove the last straw. The options would then be to throw the series in order to salvage ties or to score an honest win and be slightly more sporting in other aspects of the relationship.