by Mario Cafiero, Ricardo Monner Sans and Francisco Llorens
N. of A. The National Budget 2009 for the government of Cristina Fernández to Congress reveals a firm decision to resort to the Central Bank's reserves to pay debt maturities over the next year, allocating 24.618 million - almost 11% of the total budget, to comply with international creditors (both Paris Club and the bondholders). To the extent that this budget provides in Article 72, amend the charter of the Central Bank to use more reserves in the "honor" of debt, eliminating the cap on loan advances.
Thus, it would allow the Government to pay any debt reserves is expressed in foreign currency. The letter reproduced below was sent to the owner of the Budget and Finance Committee of the Chamber of Deputies, warning its members, as the words of one author, Mario Cafiero, "" about the enormity that are about to commit, which under Article 29 of our Constitution, typify the crime of 'infamous traitors to the Motherland ", leaving the Fortunately for the Argentines at the mercy of the government or third parties. Especially in the context of the current international financial crisis sweeping the world. "
Cafiero also adds that" reach into Central Bank reserves, is the same as putting your hand into the pocket of all Argentines, since women under current legislation, are those that uphold the value of our currency. Therefore in the future probably will put hand in his pocket and not notice that we lack pesos, but if we notice as in 2002, that with those weights can only buy so much less. So we can say without exaggeration that defend the Central Bank's reserves, is to defend the dignity of our wages, our wages, our pensions, and the honest earnings of our businesses. "
Buenos Aires, October 7 , 2008
Chairman of the Budget and Finance Committee
Don Gustavo Angel Marconato
Subject: Warning very serious implications of Article 72 of the Budget Bill 2009, with the scope provided for in art. 29 of the CN.
ago
this: formal letter sent to Pte 10/03/1908 BCRA and presentation held on 23.9.2008 to the Bicameral Commission Act 26,122.
In our consideration:
We are writing to you and through you to the other Members of that Committee members to warn of the enormous, speaking plainly, evil thing that this commission is about to commit, especially in the current crisis International Finance with the approval of Article 72 of the draft 2009 budget submitted by the Executive. The
art. 72, it could be called as the anthem external debt as it seeks nothing less than change the Central Bank Charter, for the purpose of using its international reserves to "honor" the payment of external debt.
that Article 72 is approved it would far exceed the superpowers of Cavallo, which claimed in 2001 to pay the debt with the guarantee of taxes, a claim that rejected him in extremis Congress. Today again try to impose that debt will be paid with blood, sweat and tears of the Argentines, who now provision has been added to the common wealth of the Argentines, as they lay hold to support essential social good that is our currency.
Similarly
year 2001, which took hold international reserves of the banks and Central Bank now seeks to dip into the reserves of the BCRA. The story of 2001 as we all ended. Much of the foreign creditors in anticipation of the planned Argentine default, fell off his debts, and in return the Argentine financial system came packed with foreign debt securities. And consequently the emptying of the BCRA and our financial system, brought down catastrophically our economy and our society. Now again we could arrive at a similar situation, in which the emptying of the BCRA and its subsequent inability to regulate currency, would lead in turn to the emptying of the Argentine financial system, with all the economic and social consequences that would entail. We arrived at this
vulnerable BCRA inter alia as a result of the defection of the Congress complete its legislative work on substantive issues, to delegate this to the Decrees of Necessity and Urgency of the Executive Branch and to allow illegal patches legislation introduced in the background, through hidden items in the budget law.
Thus the laws have been transformed into a normative chaos, away from the systemic system should, thus facilitating any disaster and adventure. Logically, if the service or the powerful foreign interests and against the national interest.
In this particular case, the question began with the DNU 401/2002, which was issued in early 2002 during the crisis, by President Duhalde. With it enabled the Central Bank to issue debt, authority that had been expressly prohibited in 1992, having been the architect BCRA essential fraudulent debt burdens us today.
From there, that allowed the BCRA DNU buy stocks look leverage through the issuance of bills and notes galore (Lebac and Nobac), they even concealed by repo transactions. It should be noted that the current international financial crisis is precisely a crisis of leverage, which is reached by the proliferation of "new instruments" as Lebac and Nobac and passes. Instruments and reserves seem to create anything, also can be destroyed quickly if the suspicion is rife as at present, in the same way that a house of cards collapses.
The next twist was the DNU 1599-1505, issued in late 2005 by President Kirchner, who allowed the cash payment to the IMF. Despite this body have been the main co-responsible for the debacle of Argentina `76 onwards, and the crisis terminal del año 2001. Con dicho DNU se subvirtió el sentido de la Carta Orgánica del BCRA, al establecer inusitadamente que las “reservas de libre disponibilidad” no son las que cubren la base monetaria, sino las que exceden esta. Se eliminó así absurdamente el concepto de reservas netas, que redundantemente, como lo dice cualquier manual de economía o contabilidad, son las verdaderas reservas. De esta manera se dispuso que esas seudo reservas de libre disponibilidad, pudieran aplicarse al pago de las obligaciones con los organismos financieros internacionales.
A continuación en el año en curso, con el decreto 1.394 y el DNU 1.472 se dispuso el pago cash al Club de París, partiendo de erradas digresiones respect the international status of the Club of Paris, and by implementing confusing exceptions to the Central Bank Charter in relation to the amount of advances that may give the Treasury. The payment to the Paris Club is an unlawful action and absurd. It is unlawful for the origin of the debt from the bloody military dictatorship, which promptly rejected by Congress (Law Nr 23854). It is absurd in light of the current international financial crisis that moves the world.
algid More details on this issue are outlined in the attachments that accompany the present, consisting of a copy of the formal letter sent on October 3 ultimo. Mr. President of the BCRA - (See previous note on this blog) -, and a copy of the presentation made on September 23 ultimo. before the Joint Standing Committee on Legislative Procedure Act 26,122.
This succession from falling today reached its culmination with Article 72 of the budget bill, with which it would, without any limitation as to the pseudo "free availability of reserves, the payment to international financial institutions and any other foreign currency denominated debt. Metaphorically in this way (as did Cavallo in 2001, allowing the Central Bank reserves and the banks could be integrated with government bonds) is is conducting a gap to the Treasury of the Central Bank through which external creditors may bear the reserves backing our currency and the soundness of the BCRA accounts, leaving it as empty as in 2001.
is hardly necessary to point out that the constitutional provision of Art. 29 around a subject like this, would place those who are the protagonists in the category of infamous traitors to the Fatherland. Beyond the absolute weak judiciary, we do not believe that the Argentine people in a position to support this with impunity a new fraud similar or equal to 2001.
In this regard we express to Mr. President and Mr. Legislators are much more positive alternatives to genuine interests of the country, in order that Argentina can meet the financial crossroads where it is today. This crossroads is a result of bad debt arrangement was made in 2005, in which Congress again delegated its powers the executive branch more direct. Errors and omissions of the past, are the causes of the financial difficulties of the present. And the current errors are the causes of the financial difficulties of the future. That may appear remarkably increased in the light of the financial crisis sweeping the world. It is personal and nondelegable responsibility of Mr. Legislators, which will not happen.
If your interest is we are able to personally present such alternatives.
greet you attn.
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