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Viewing cable 06BUENOSAIRES677, CONVERSATION WITH CARLOS ZANNINI

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Reference ID Created Released Classification Origin
06BUENOSAIRES677 2006-03-22 18:35 2011-03-27 00:00 CONFIDENTIAL Embassy Buenos Aires
Appears in these articles:
http://www.lanacion.com.ar/1360704-de-vido-eje-de-las-sospechas-de-eeuu
VZCZCXYZ0000
RR RUEHWEB

DE RUEHBU #0677/01 0811835
ZNY CCCCC ZZH
R 221835Z MAR 06
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 3916
INFO RUEHAC/AMEMBASSY ASUNCION 5433
RUEHBR/AMEMBASSY BRASILIA 5229
RUEHLP/AMEMBASSY LA PAZ MAR MONTEVIDEO 5427
RUEHSG/AMEMBASSY SANTIAGO 5036
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
C O N F I D E N T I A L BUENOS AIRES 000677 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 03/23/2016 
TAGS: PREL PGOV ECON PTER AR
SUBJECT: CONVERSATION WITH CARLOS ZANNINI 
 
REF: A. 05 BUENOS AIRES 141 
 
     B. BUENOS AIRES 625 
 
Classified By: CDA Hugo Llorens for Reasons 1.4 (b) and (d). 

 

1.  (C) Summary:  DCM, accompanied by PolCouns, met on March 

20 with Carlos Zannini, the Secretary for Legal and Technical 

Affairs in the Casa Rosada.  This was our first face to face 

meeting with Zannini since last November's Summit of the 

Americas.  Zannini is widely considered to be the 

intellectual force within President Nestor Kirchner's inner 

circle (see Reftel A for biographic information).  With the 

departure of heavyweights such as former Economy Minister 

Roberto Lavagna and Foreign Minister Rafael Bielsa and the 

recent resignation of Santa Cruz governor Sergio Acevedo, 

Zannini is probably second only to Planning Minister Julio De 

Vido in shaping political and economic strategy within the 

government.  End Summary. 

 

2.  (C) Zannini opened the conversation with a defense of 

government economic policy.  He pointed to the reductions in 

unemployment and poverty rates and the increase in the 

investment rate to 26 percent of GDP as vindication of the 

GoA's policies.  Asked about inflation concerns and what he 

considered were tolerable levels of inflation, Zannini 

responded the government's goal was to keep the inflation 

rate to 10 percent.  He defended the use of price controls 

and the recent decision to ban the export of beef products 

for 180 days as legitimate and effective measures to control 

inflation.  He justified these measures by claiming that 

markets didn't work freely in Argentina and that ""cartels"" 

in, for instance, the meat industry manipulated supply and 

demand to affect prices.  The DCM noted that while price 

controls may well reduce sector prices in the short term, 

continued prudent fiscal and monetary policies were still 

required to prevent a sustained inflation spillover as money 

supply increased. 

 

3.  (C) Turning to politics, Zannini claimed the abrupt 

resignation (Reftel B) of Santa Cruz governor Acevedo had 

come as a ""complete surprise"" to the Casa Rosada.  He 

acknowledged that Acevedo's ""style"" of handling difficult 

issues was perhaps not what Kirchner would have preferred and 

that mistakes had clearly been made in the labor dispute in 

Las Heras during which a policeman was killed.  But he denied 

accusations that Kirchner had forced the resignation of his 

former vice governor and confidant and even expressed a 

certain amount of disgust that Acevedo had not given the Casa 

Rosada advance notice of his intentions.  Comment:  The 

timing of Acevedo's resignation may well have taken the Casa 

Rosada by surprise.  But the open and well-documented 

interference in provincial affairs by Kirchner insiders such 

as De Vido and Alicia Kirchner, particularly in the 

appropriation of public works monies, had clearly put Acevedo 

in an untenable position.  End Comment. 

 

4.  (C) Moving to presidential politics, Zannini claimed 

Kirchner was still undecided about his intentions for 2007. 

He said Kirchner was very much aware that there were ""no 

popular two-term ex-presidents in Argentina"" and that he was 

more concerned with ensuring that the political agenda he had 

begun was continued beyond 2007 than he was in seeking 

reelection.  He said Kirchner was willing to ""walk away"" in 

2007 if he felt that was the best way to preserve his legacy 

and policies.  That said, Zannini said Kirchner would easily 

win reelection should he decide to run and acknowledged there 

was a certain amount of political advantage to be gained from 

delaying any official announcement. 

 

5.  (C) Finally, the DCM took the opportunity to seek 

Zannini's support in pushing for legislation in the Argentine 

Congress to combat money laundering and terrorism financing. 

The legislation, which is required for the implementation of 

the Inter-American Convention Against Terrorism and the UN 

Convention on the Suppression of the Financing of Terrorism, 

has been stalled in the Congress since last year.  Zannini, 

who was well versed on the subject, expressed his support for 

the measures and his confidence that the appropriate 

legislation would be passed and enacted this year. 

 

6.  (C) Comment:  With the resignations of Cabinet 

heavyweights such as former Economy Minister Lavagna and 

Foreign Minister Bielsa who were both willing to disagree 

with Kirchner, Zannini has become the principal intellectual 

force in the President's shrinking circle of close advisors. 

 

In terms of overall power to influence both economic and 

political policy, Zannini currently is probably second to 

none.  End Comment. 

 

7.  (U) Reftels available at 

http://www.state.sgov.gov/p/wha/buenosaires.< /a> 

LLORENS 


=======================CABLE ENDS============================

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