I do not usually third-party items rebloguear, but “Do not cry for me Argentina. Weeps for you” economist Xavier Sala i Martín It is required reading to learn the party and family interests that lie behind the decision to expropriate 51% Repsol. There I leave you with this pearl, which actually comes from a speech at the radio station RAC1 last 17 of April.
Do not cry for me Argentina. Weeps for you
Let's see if we understand each other. It is true that the Argentine neo-nationalism has played a role in the expropriation of Repsol, It is true that the violence raging naciolismo appears whenever the government needs camouflaging serious problems (and the Argentine government is no exception) and it is true that the nationalization will harm, essentially, a Argentina (and here the only thing that has hit the nail is the mayor of Buenos Aires, Mauricio Macri, which it seems to be the only sensible politician nationwide): He asked me yesterday if public who had shot himself in the foot was Froilan, King Juan Carlos and Cristina Fernandez de Kirchner. The answer is… All three at once!
All this is true, but I think that Argentine citizens should begin to see that their political leaders not only use nationalist populism to win their sympathies, they are corrupt thieves who steal the wealth of their country. YPF nationalization has nothing to do with the energy needs of the people but by the incompetence of Dona Cristina, the desire to hide a nefarious management and, above all, with the corruption of its environment… and her son Maximo.
The story begins between 1992 and 1999, when the Peronist government of Carlos Menem (the same party of Kirchner) decides to privatize YPF because of the huge amount of losses of the company. It was a time when the company was mismanaged (like almost all public companies around the world) and the price of oil was around 15 dollars a barrel. The Spanish company Repsol, then directed by Alfonso Cortina, YPF bought the government of Menem (I repeat, the same party that Kirchner).
1999 It was a time when "Spain went well". Remember him? It was the Spain of pelotazo, New-rich slicked giving lessons worldwide management and heads of government who smoked cigars with his feet on the table. That arrogance was etched in the minds of many Latin Americans who have waited years to collect their moral debts. To all dog has its San Martin (not your Sala i Martín, which it is a different phenomenon) and it seems that Spain has come time to pay the humiliation to which he treated the citizens of Latin America.
Having said that, and accepting the arrogance of the nouveau riche Spanish, the truth is that REPSOL paid (I repeat, PAYMENT) the price asked by the ruinous government company: 15.000 millions of dollars. The merger was exemplary to the point that the Financial Times awarded the annual prize for the best REPSOL merger of year.
In addition to these 15.000 initial million, REPSOL has invested a total of 20.000 million between 1999 and 2012, including some 3.200 million 2011. 20.000 million 12 years is not a small investment, whatever it says the Argentina President. In fact, one of the results of these investments has been the discovery of Vaca Muerta deposits that can give extraordinary economic results despite yet to see the quality of oil deposited there.
In 2007, Antoni Brufau and already in front of the oil, President Nestor Kirchner asked REPSOL an Argentine group became part of the company. It was the Petersen family group of Enrique Eskenazi. The Eskenazi family was a family of the high bourgeoisie of Santa Cruz, region that had been presided (oh! chance!) by Nestor Kirchner, before he became president of Argentina. In fact, Enrique Eskenazi was a close friend of Don Nestor, so intimate that he had funded election campaigns that brought him to power. That is to say, President Kirchner forced into 2007 REPSOL to accept an Argentine partner, casually, He was a close friend of all life and that he had some political favors. Antoni Brufau accepted because I knew it is always good to have local investors with political connections. It is good that insiders will signal the existence of amber lights before they become red. Why he accepted the Eskenazi family has first 15% and then him 25% of the company.
But there was a small problem: the Eskenazi were the richest people in Santa Cruz, but one thing is that your children will wander through the village in gaudy red Ferraris or luxury chuleen by the hottest clubs in the area and something else very different is to buy the 25% a company worth tens of millions of dollars. The Eskenazi were not so rich!
How does the family friend buy Kirchner 25% REPSOL-YPF? Thus forcing YPF to lend him the money! I repeat, Nestor Kirchner REPSOL forces to lend money to a family friend buy it for the 25% REPSOL. And how will such a family millionaire pay that amount? Well, with the dividends of own REPSOL. That is to say, REPSOL, Kirchner's government and the Petersen family group Eskenazi sign a contract (deposited with the Security Exchange Commission of New York) REPSOL forcing to give the 25% of its capital to the Eskenazi family and agrees to pay it back with dividends REPSOL. To ensure that REPSOL can collect that “credit” (or perhaps we should call it a racketeering), REPSOL is obliged to distribute as dividends the 90% its benefits.
That is to say, when Mrs. Kirchner accuses REPSOL not to allocate a greater share of its profits to investment and oil exploration, does not explain that her husband (I repeat, HER HUSBAND) REPSOL had forced to use the 90% of the profits to pay dividends for your friends (I repeat, HIS FRIENDS) from appropriating 25% REPSOL when they had a dollar to buy such number of shares(*).
But it does not end here. Mr. Enrique Eskenazi placed their children in the company (in particular, Sebastian puts his son as vice president) and instead of acting as the local partner playing the role of alerting the amber lights before they appear red lights, it behaves like a mobster who recently incompetent to defend the interests of the company that runs.
Little by little, REPSOL see who has gotten in trouble and that local partners play more in favor of politicians who have placed them in the charge for the company they represent and will soon appear nationalization rumors. They are the last days 2011 and REPSOL has discovered deposits potentially millionaires Vaca Muerta. The rest of the story is already known. Cristina Fernandez de Kirchner, Remote Control by economist Axel Kicillof(**), Marxist scholar, mentor of the time Campora (association created by Kirchner) and close friend of the son of the president, Máximo Fernández Kirchner, announces the expropriation of 51% REPSOL-YPF. "Interestingly," the 51% of the shares expropriated come from 57% which is owned by the Spanish partners. exactly 0% comes from 25% with Argentine partners, Kirchner's Dad friends, the Eskenazi family (and also expropriates 0% US investment fund owner of 17%… and remember that spends three days after Mrs. Cristina met with Obama “negotiate” the topic).
The big problem of the expropriation of REPSOL is that the government's response to Spain, chaired by Don Mariano Rajoy, It will necessarily be weak. Spain is an impoverished country with very little bargaining power and no ability to pressure their (theoretical) allies: the European Union and the United States. Both one and the other have less desire to help their Spanish "partners" that spending accounts for the arrogant attitude of the Spanish presidents (Aznar and Zapatero) not long ago they gave them leccioncillas when things went well. And I say that's the big problem of Spain for two reasons. The first is that Argentine leaders, seeing the weak reaction of Spain, They will grow your ego at the same rate decreased when Thatcher's England were humiliated in their stupid Falklands campaign and his inflated ego will increase your thirst or expropriating their anti-Spanish REPSOL revenge: they seriously think of expropriating other Spanish companies such as Telefónica, Santander or BBVA. We'll see.
The second reason why the spectacle of YPF is a problem for Spain is that other Latin American governments, also wounded by the Spanish neocolonialist arrogance of the Nineties, they are watching. And the desire for revenge Argentine can spread to the rest of the continent. We also have to wait to see how it evolves.
In the meantime, the crisis has turned Spain into an economic body that will induce scavengers around the world feed their spoils: the Argentine government will continue its cocky threats, the rest of Latin America humiliated not be left behind, But that is not all: Chinese oil companies try to exploit the deposits leaving REPSOL and Argentina can not afford to explore, American banks are going to fill the void that leave Santander and European multinationals, yes, yes, the European partners and brothers, They will be on the lookout, attentive to keep any part of the business that the incompetence of the Spanish leaders leave without defending.
(*) Everyone knows that, for more Dona Cristina now make lagrimita fall when she talks about her late husband, Mr. Kirchner had spent years living separate and parallel lives, very much in the direction of the kings of Spain, where the monarch is to hunt elephants (o eran elefantas?) Botswana while his wife is going to look for Easter eggs to Greece and when she learns of the accident it, It takes five days to give a visit… guys at 20 minutes!
(**) Axel Kicillof is the radical paleomarxista has managed to outshine the minister Amado Boudou, who he tried to ban books or Samuelson Sachs in Argentine universities as "neoliberal". Kicillof professional life, a teacher 41 years ago, It has been a sniper at the University of Buenos Aires, where he majored in history of economic thought. Al doctorar said Keynes was a radical thinker distorted by bourgeois analysis. For him, Stiglitz and Krugman are almost as liberal as Mankiw or Barro. Come now! Close friend Max Kirchner and ideologue of expropriation. With these intellectual leaders directing the counter kirchneriana one should say, Although the episode of YPF is a sign of Spain has problems, the major problem is not Spain but Argentina!