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C O N F I D E N T I A L SECTION 01 OF 03 BUENOS AIRES 001198 
 
SIPDIS 
 
DEPT PLEASE PASS TO TREASURY FOR NLEE/LTRAN/WLINDQUIST; SAO 
PAULO FOR WBLOCK 
 
E.O. 12958: DECL: 11/04/2019 
TAGS: ECON EFIN EIND EINV PINR PREL ETRD AR
SUBJECT: ARGENTINE ECONOMY MINISTER: GOA LOOKING FOR U.S. 
SUPPORT 
 
REF: (A) BUENOS AIRES 1161 (B) BUENOS AIRES 976 
 
Classified By: Ambassador Vilma Martinez for reasons 1.4 (B) and (D) 
 
¶1.  (SBU) Summary:  In the Ambassador's introductory call on 
Minister of Economy Boudou, the two discussed the status of 
the GoA's latest offer to the bond ""holdouts,"" discussions 
with the IMF and Paris Club, and U.S. investment in 
Argentina.  Boudou was confident of a successful deal with 
the holdouts, although he stressed the need to isolate the 
""vulture"" funds that opposed the deal.  These will be 
followed by negotiations in 2010 with the IMF and Paris Club, 
eventually leading to Argentina's reaccess to international 
credit markets.  Boudou also asked that Argentina be included 
in the itinerary of any visit by President Obama to South 
America.  End Summary. 
 
BOND HOLDOUT DEAL COMING 
------------------------ 
 
¶2.  (SBU) Ambassador, accompanied by DCM and ECouns, met 
November 3 with Minister of Economy Amado Boudou in her 
ongoing round of inaugural meetings with Cabinet ministers. 
As expected, Boudou used the meeting to focus on the new GoA 
initiative, announced by him two weeks ago, to launch a new 
offering to outstanding holders of the remaining USD 20 
billion in Argentine debt from the 2005 debt swap, as the 
first step to Argentina's reentry into international credit 
markets (ref A).  Boudou told the Ambassador that he was 
confident that an agreement will be completed ""within 100 
days"" with holders of at least 70 percent (USD 13 billion) of 
the outstanding debt.  The Ambassador responded that the USG 
supported Argentina's latest effort to settle with the bond 
holdouts and reaccess international credit markets. 
 
¶3.  (SBU)  Boudou thanked the Ambassador and noted that he 
will begin a roadshow to promote the holdout offering shortly 
after his trip at the end of the week for a G-20 meeting in 
St. Andrews, Scotland.  He said his plans include public and 
private sector meetings in the U.K., Germany, Italy, and the 
United States, where the bulk of the holdouts are 
concentrated.  Boudou expressed concern regarding opposition 
to the Argentine offering from vulture fund holders of 
Argentine debt which he described as ""neither American nor 
Argentine.""  He argued that they were offshore investors who 
keep their money in tax havens like the Cayman Islands and 
employ no one.  Boudou said that it was important that these 
funds, which are represented by influential lobbyists, be 
isolated to ensure success.  He noted that the required 
filings with the Securities and Exchange Commission and 
similar regulators in other countries had begun and that the 
necessary authorizing legislation in the Argentine Congress 
would be voted on by the lower house this week and the Senate 
soon after.  He characterized prospects for passage as 
virtually certain. 
 
FOLLOWED BY IMF AND PARIS CLUB 
------------------------------ 
 
¶4.  (SBU)  DCM asked what GoA's plans were with respect to 
the IMF and Paris Club.  Boudou replied that the GoA wants to 
move forward with both, beginning with the IMF in the first 
quarter of 2010 following an agreement with the bond 
holdouts.  He noted that Argentina wanted to restart the 
30-year relationship it had with the Fund before severing 
those ties in 2006.  The question now was finding the 
political space to reengage.  Boudou asked for U.S. help when 
the GoA is ready to move forward, particularly with the Paris 
Club negotiations.  He said that he might seek to mention 
 
BUENOS AIR 00001198  002 OF 003 
 
 
that point to Secretary Geithner in St. Andrews next week. 
 
FOREIGN INVESTMENT IS NEEDED 
---------------------------- 
 
¶5.  (U)  Boudou told the Ambassador that Argentina is looking 
for not only international credit but, more importantly, 
foreign direct investment, and he sees the U.S. as playing a 
particularly important role.  Citing General Motors, Ford, 
Kraft, and Wal Mart as examples of US companies with major 
investments in Argentina creating thousands of jobs, Boudou 
said that the GoA wanted to work with the USG on policies and 
programs that encourage more investment.  He added that there 
was no contradiction in protecting both employment and 
investment.  The Ambassador noted that there may be 
opportunities to foster greater state-to-state relationships 
such as between Buenos Aires Province and her home state of 
California with its diversified, technology-driven economy. 
 
REQUEST THAT PRESIDENT OBAMA VISIT ARGENTINA 
-------------------------------------------- 
 
¶6.  (SBU) Boudou noted rumors of a possible visit to the 
region next year by President Obama.  In the event the visit 
happens, Boudou argued that it was important that Argentina 
be included.  He argued that Argentina is moving towards a 
more cooperative, market-oriented approach to international 
economic policy, and a visit could accelerate the momentum of 
that swing.  He also asserted that a visit here to another 
important G-20 country would fit in well with President 
Obama's collaborative global vision. 
 
Comment:  A Stealth Admirer of the United States 
--------------------------------------------- --- 
 
¶7.  (SBU) Throughout the meeting Boudou described himself as 
unabashedly pro-American (and where he still prefers to take 
vacations), though he added that he had to be careful to 
downplay this publicly.  So far, holdout deal 
notwithstanding, his familiarity with the United States 
manifests itself in the ease with which he relates to 
American interlocutors, but not in the economic policies that 
he has pursued for this populist government. 
 
¶8.  (SBU) With respect to the bond holdout deal, Boudou 
appeared confident he would get one, though his concern with 
the vulture funds as potential spoilers was manifest in the 
Ministry's press statement after the meeting that highlighted 
the need to isolate the ""so-called vulture funds.""  It is 
also clear that he was carrying a message from the Kirchners 
in asking that the President include Argentina on any visit 
to South America.  With four months under his belt thus far 
as Economy Minister under the Kirchners, Boudou appears to 
have won the confidence of the President and her husband in 
moving forward with an agreement with the bond holdouts, IMF, 
and Paris Club creditors, in that order, on the road to 
accession back to the international financial markets. 
Whether Boudou is eventually successful will depend, as he 
says, on the political space available to him in 2010. 
 
Bio Notes 
--------- 
 
¶9.  (C) Boudou said that he likes to ski every season at 
Aspen and surf at San Diego-area beaches.  He also described 
himself as a fan of the National Football League.  Boudou 
spoke more English in the meeting than we've heard before 
(ref b); it seems to be serviceable, though he clearly is 
much more comfortable in Spanish.  Boudou's political savvy 
 
BUENOS AIR 00001198  003 OF 003 
 
 
was reflected by the only three photos that he keeps in his 
bookcase.  One features President Cristina Fernandez de 
Kirchner (CFK) alone; another is of CFK and him; and in the 
third, Boudou gazes attentively at CFK's husband, 
ex-President and government strongman Nestor Kirchner. 
MARTINEZ