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Capital Markets

Argentina faces up to a crisis

Central bank governor Martin Redrado is confident he can win the fight against inflation, but investors are sceptical of Kirchner’s policies.

Argentina: Cristina fumbles a critical crisis

Argentina has done well out of the commodity boom but bankers and the man in the Buenos Aires coffee shop are frustrated by the government’s failure to sustain a thriving economy. Chloe Hayward reports.

Argentine president Cristina Fernández de Kirchner

THE EDITORIAL IN Aerolineas Argentinas’ in-flight magazine reads: "Toda crisis es una oportunidad." Aerolineas is a company in the middle of a crisis. Sadly, the opportunities are not that apparent.

The day Euromoney attempted to travel with the airline only a handful of flights took off, and all of these were several hours delayed. Two days earlier, on July 25, the Argentine carrier, which has debts of more than $890 million, had been renationalized. Far from describing the change in ownership as an opportunity for the Argentine government, one banker declares the venture to be a void into which the government was throwing money. "Renationalizing Aerolineas Argentinas was a major mistake," he says. "I don’t know what the government was thinking."

In contrast to Aerolineas’ hopeful magazine editor, many Argentine bankers believe the Chinese proverb is back to front where their country is concerned. "Instead of saying out of every crisis comes opportunity, it should be out of every opportunity, Argentina creates a crisis," says a senior banker in Buenos Aires.

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