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Argentina: seizing the currency printer
Another Argentine expropriation. Another which the government confidently expects “won’t cost the state a penny”.
After Cristina Fernández’s government took over energy company YPF in April (Congress approved the expropriation of 51 per cent of the company in early May), for reasons of national interest (and for which it hopes not to have to pay anything), now it is the turn of banknote-printing firm, Compañía de Valores Sudamericana (CVS).
Cristina Fernández, the president, used an emergency decree on Tuesday to place the company (usually referred to using its former name, the ex-Ciccone Calcográfica) under state administration and has sent a bill to Congress to expropriate it. Hernán Lorenzino, the economy minister who seems to have been usurped from his own job by his powerful deputy, Axel Kicillof, was dispatched on Wednesday to defend the move in public and to provide assurances that it won’t cost the state anything extra, after, of course, the company’s “large” debts to the tax agency are taken on board.
The bill will go before the Senate on Thursday. Voices from the government camp have been arguing, variously, that it is a sovereign act to have banknote production controlled by the state; that the company had a great deal of idle capacity that could be put into service; that there was a plan afoot to outsource services and favour another company.
All ignore the rather large elephant in the room: the company is at the centre of a criminal lawsuit involving Amado Boudou, the Argentine vice president. Oh, and the government would like to expropriate CVS, even though who it would be expropriating from is unclear since the identity of the owners is not public information.
Government critics see little more than a manoeuvre to protect Boudou; after all, the government did not see fit to intervene in the company earlier, and did nothing even when Argentina, forced by inflation to pump out more banknotes, outsourced production of some 100-peso bills to Brazil and they, embarrassingly, came back faulty.
Aníbal Fernández, a government Senator and former cabinet chief, noted – with no trace of irony – that the government “permanently” needed to make banknotes and said the government had “taken the bull by the horns” to sort out CVS’s debt situation and turn it into a company able to be responsible for currency printing.
But the Boudou scandal is not over yet. The investigating judge, Ariel Lijo, is pressing on with his examination of all the evidence and has applied for Boudou’s latest sworn statement about his personal finances.
Whether the expropriation move will torpedo the investigation remains to be seen. But it looks untransparent, and politically expedient, to say the least.
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