Kirchner cancels China trip in row with deputy

A SPECTACULAR political bust- up with former allies has forced Argentina’s president Cristina Kirchner to cancel a visit to China in order to avoid leaving her own vice-president in command of the country during her absence.

The two fell out in 2008 and are now on opposite sides of a bitter row over the president’s attempts to sack the head of the country’s central bank, a move vice-president Julio Cobos opposes.

This week Ms Kirchner was to have led a high-powered trade mission to Argentina’s second-biggest export market after Brazil, visiting Beijing and Shanghai and meeting Chinese political and business leaders.

However she sent her foreign minister instead, lest Mr Cobos use her absence to frustrate attempts to eject the central bank chief, another former ally with whom Ms Kirchner has recently fallen out.

Under Argentina’s constitution, the vice-president has executive authority when the president is out of the country.

Explaining her decision to reporters, Ms Kirchner said: “It is a great error when the vice-president does not exercise the role assigned to him by the constitution and, not only has he converted himself into the leader of the opposition, but also directly obstructs and blocks the measures of the presidency.”

The opposition decried the decision as the latest example of how Ms Kirchner’s divisive and high-handed style of governing is undermining Argentina’s image abroad.

From the opposition Radical party, Mr Cobos was Ms Kirchner’s running-mate in her landslide victory in 2007 when her husband and predecessor Nestor Kirchner used bulging government coffers to buy support from across the country’s political spectrum.

Once in power, though, Ms Kirchner shut her vice-president out from her inner circle. Mr Cobos retaliated in July 2008 by casting the deciding vote in the senate to defeat her attempt to increase taxes on farm exports, as she sought to replenish coffers depleted by runaway government spending and the global downturn.

Since then the two have not spoken and Ms Kirchner openly calls Mr Cobos a leader of the opposition. The dispute over the controversial taxes led to a major erosion in political and popular support for Ms Kirchner from which she has not recovered.

The latest clash over control of the central bank follows Ms Kirchner’s summary dismissal of its president earlier this month when he refused to pay $6.7 billion (€4.8 billion) of bank reserves into a special fund designed to assure foreign investors that Argentina will meet large debt repayments which fall due this year.

Martín Redrado challenged his sacking in court, claiming the central bank was independent and he could only be removed after consultation with congress. Legislators held hearings this week, with the president and vice-president trying to rally their supporters in the fragmented congress for and against the bank chief.

Mr Redrado had been seen as a loyal supporter of the president, vouching for inflation numbers that most Argentines and financial markets believe are manipulated in order to hide spiking prices and reduce interest payments on inflation-linked bonds.

However, in an interview published on Monday by the country’s biggest-selling newspaper, Mr Redrado was quoted as threatening to reveal “specific lists of friends of power that bought dollars”, which was widely interpreted to mean persons linked to the Kirchners who have funnelled money out of the country.

Accusations of corruption against the first couple and their circle have multiplied in recent months. The Kirchners declared last year in a disclosure required by law that their personal wealth had increased by 605 per cent to €8.5 million since Nestor Kirchner assumed the presidency in 2003.

Mr Redrado’s lawyer denied that he had made the threat.