The Most Dangerous Politician In Latin America

Axel kicillofAP PhotoAxel Kicillof, Argentina’s Economy Minister

On Monday Argentina’s Economy Minister Axel Kicillof will meet with a Special Master of the Court to negotiate his country’s debt with a group of hedge fund creditors, and right now that makes him — an economist with a strong Marxist ideology — the most dangerous politician in Latin America.

If negotiations fail the republic faces default and financial ruin. Still Kicillof has made no secret of his desire to maintain his country’s hardline stance on negotiating with creditors.

In fact, last week it was reported that he might blow off the meeting completely even though he’s been in the United States for some time making Argentina’s case to international bodies in Washington.

“Argentina is committed to talks [with the creditors] but it asks for equal conditions,” Kicillof said in a 45 minute presentation to the Organisation of American States. “We cannot do so under extorsive conditions.”

It remains unclear what he means by “equal conditions,” but what is certain is that these are not signs that Kicillof is willing to have a productive conversation. He asked “the world and the OAS to take sides in the issue and stand with Argentina in avoiding one judge putting in danger everything Argentina has done to get back on its feet.”

That judge, Judge Thomas Griesa, gave his final word in a U.S. Court in 2012 and the Supreme Court upheld it this year. The word was that Argentina must immediately pay a group of hedge fund creditors, known as NML, more than $US1.3 billion worth of debt dating back to its last financial meltdown in 2001 by July 30th.

Argentina refused to pay these so-called “vulture capitalists” because, unlike over 90% of other bondholders, NML refused to take a haircut on this debt. The republic insisted that it should be able to pay creditors that did restructure, and the holdouts, but Griesa shot that down entirely.

Kicillof, Economy Minister since November, has been outspoken about his disdain for the holdouts. At the core of his understanding of Argentine finance is the belief that dramatic, nationalistic action should be taken to improve the country’s economy. It was he who, as Deputy Economy Minister in 2012, spearheaded the nationalization of YPF, an oil and gas company owned by Spanish firm Repsol.

That brazen move propelled Kicillof to Argentina’s main stage. The former leader of a radical student group, at 42 he lives a modest lifestyle in a middle-class neighbourhood and drives a 2008 Renault. Argentine media call him “Excel” because of his obsession with numbers and spreadsheets. They also say he has a special, almost hypnotic power over President Cristina Fernandez de Kirchner.

The son of a psychiatrist and a psychologist, Kicillof has said that he believes the dollar has too much power over the Argentine mind. He considers this a cultural economic phenomena that must end, one with a sort of “magic” power to cause disaster.

The thing with Kicillof, though, is that he can turn back from a precipice if he has to. While he did lead the nationalization of YPF, he also lead talks to pay Repsol back for the seizure. He’s also negotiated paying back debts to the World Bank and the Paris Club. These are signs that he does want to make Argentina credit-worthy again.

Still, it has been made clear time and time again in this saga that these “vultures” occupy a special place in the minds of Argentina’s leaders. To them, this debt is not the same as other debt, and today the government published a legal document in several national papers arguing that Judge Griesa does not have the legal jurisdiction to block its payments to other creditors as he did last month.

Again, not a good sign.

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