“I made my first trip to Argentina in 1983: in the engineering factories, and not only in those linked to Italian companies, there was a photo of Giulio Andreotti, the Italian Prime Minister at the time”. The tale of Giulio Sapelli, professor of Economic History at the University of Milan and linked to Argentina through various study experiences, gives an idea of how strong the cultural and entrepreneurial bond is between Italy and the second largest South American economy, home to nearly one million people of Italian origin.
Next Wednesday Matteo Renzi will be the first European prime minister to visit newly elected Argentine president Mauricio Macri, and on the table of the meeting there will not only be historic friendship and cultural closeness, but various political and economic issues. "From that episode - continues Sapelli - I understood that our mechanics were seen as world-class excellence, even more than the German one". And this is still the case today, with the presence of many Italian groups who will now be able to enjoy new opportunities with the reopening of Macri to the markets. "Macri is putting an end to the Peronist statism that has destroyed the country: it is true that he is doing it with decrees, bypassing the parliamentary debate, but unfortunately this is necessary because he does not have such a strong majority".
Recourse to the decrees is undoubtedly a point of contact with the Renzi government's methods of action, as is the strong propensity for communication on social media, Twitter above all (Macri also has a very up-to-date Instagram profile, followed by over half a million people) , but according to Sapelli there isn't much else to link the two leaders: “They are two figures who have been able to interpret personal party forms: the first, Renzi, personalizing an already existing party; the second, Macri, refounding the Argentine liberal right. Otherwise, however, they have little in common: the new tenant of the Casa Rosada belongs to the upper class and politically he is an American liberal, whereas Renzi has provincial origins and is a Christian Democrat”.
This will not prevent them from having a dialogue, allowing Argentina to start one new phase of its international policy, breaking the isolation wanted by Cristina Kirchner: “Populism has failed, just look at how Venezuela is reduced, whose experience has been the real evil of the continent in the last decade. Instead, look at how the countries that have not participated in this political and economic isolation are growing, such as Peru, Colombia, or Correa's Ecuador itself. Now Buenos Aires wants to get back in line with the markets and with the International Monetary Fund".
There is no shortage of opportunities for Italian companies and Sapelli analyzes them as follows: “I don't think Renzi and Macri will talk much about energy: once there was Eni in Argentina, which now no longer focuses on South America. I would see better a strengthening of the position of Finmeccanica: there is an army to rearm and above all a railway system to rebuild. It would have been ideal for Ansaldo, if it hadn't been sold to the Japanese Hitachi with a negative transaction in my opinion”. AND Telecom Italy? “Telecom – according to the economist of the State University of Milan – is a beautiful metaphor: years ago, when I was a consultant for them in Baires, we shared the market of the Argentine capital 50% with Telecom France. Now I think I can say that everything is in French hands…”.
The Macrist turning point, which in view of Renzi's visit could mean a lot for Italy, is currently being much discussed at home. The free peso-dollar exchange (today a dollar is worth 14,5 pesos, the euro is close to 16) put an end to the parallel black market and was viewed positively by international markets, but it led to a devaluation of the Argentine currency and a consequent loss of the power of purchase for citizens. The Clarin newspaper, which supported Macri in the electoral campaign, revealed that milk and dairy products increased by 40%, meat by 70%, fruit and vegetables by 60%. According to some studies, in the last two months the loss of purchasing power of Argentines is around 10% also due to the abolition of the controlled prices wanted by Cristina Kirchner, which mainly affected the energy tariffs, now suddenly climbed by 500%. There is not only this: the cuts in public spending have led to 24 layoffs, which is why a maxi national strike is scheduled for February 24th. “The devaluation of the peso was necessary – explains Sapelli – and as far as the layoffs are concerned, it is not a question of the effective personnel of the public administration, but of the hirings wanted by the previous government to satisfy the protests of the piqueteros (very strong protest movements in Argentina, ed). That is welfarism, not socialism. Macri did very well to mark a break”.
Breaking that majority party Cambiemos wanted to symbolically bear on the banknotes themselves: now the face of Evita Peron or the Malvinas are no longer represented, but the animals of the typical Argentine fauna: guanacos, condors, whales. News often considered unpopular, such as the fact that the matches of the five major football clubs (Boca, River, Independiente, Racing and San Lorenzo) will now be broadcast for a fee, and moreover on private channels also linked to the Clarin publishing group, very close to Macri. However, the conflict of interests is not a priority: "For Argentina - says Sapelli - and for all of South America, a new season is opening, one of good relations with the United States". It is precisely with the USA that the new government is working, "in a competent way and different from the amateurish approach of Kirchnerism", to resolve the affair of the Vulture Funds, for which US hedge funds were offered $6,5 billion in compensation.
Also on the Italian front, 14 years after the Argentine default, the Ministry of the Treasury and Public Finance of the Argentine Republic and the Task Force Argentina (Tfa) have reached an agreement to resolve the bond issue. The dispute based on the Italy-Argentina bilateral treaty in the arbitration before the ICSID Tribunal of the World Bank will now see the award of damages for violation of the rights of international law of approximately 50.000 Italian retail bondholders, holders of approximately 900 million euros of Argentine bonds by default. Even on relations with Vatican, according to the expert economist of South America, "things should improve". Kirchner had participated, in 2013, in the inauguration of Papa Francesco, but the relationship has always remained cold. The current vice president, however, the Christian Democrat Gabriela Michetti, is very close to Bergoglio and has been known at home for years of supporting a battle against same-sex marriages.
“Macri's next international challenge – concludes Sapelli – is a strong alliance with Brazil, which beyond the corruption scandals – in my opinion artfully assembled by major American – was well directed by Dilma Rousseff. Brazil is an empire and Argentina cannot ignore it”. Perhaps, given the difficult relations of recent years, Buenos Aires will even be able to help Brasilia forge better relations with Washington. “The occupant of the White House will change by 2016: I am on the Democratic front rooting for Bernie Sanders, an old-fashioned socialist the way I like it, who I think might as well make it. Hillary is not liked by the female electorate and neither by the young people. And if Sanders were to challenge Trump in the elections, he would certainly win. At that point, however, I don't know if the establishment (which overwhelmingly supports Hillary Clinton, ed) would allow it…”.
