MercoPress. South Atlantic News Agency

Germany optimistic about Kirchner-Schröder meeting

German Ambassador Rolf Schumacher says relations between both countries are “very good.”

In a meeting with journalists yesterday, German Ambassador to Argentina, Dr. Rolf Schumacher, gave an upbeat assessment on German-Argentine relations and said he hoped bilateral relations, which he described as "very good," would be bolstered by President Néstor Kirchner's three-day visit to Germany beginning on Tuesday.

German Chancellor Gerhard Schröder and Kirchner will meet for the first time in two years after a meeting scheduled for October 2003 was postponed. Kirchner and Schröder last met at a July 2003 conference in London. Kirchner's itinerary includes a visit to Berlin's Holocaust museum and a stop-off at Volkswagen headquarters in Wolfsburg.

Schumacher said he expected the German car manufacturer (as well as Daimler-Chrysler and other German companies) to use Kirchner's visit to announce further investment in Argentina.

Kirchner is scheduled to conclude his German tour with a visit to Munich's renowned centre of scientific innovation, the Max-Planck Institut, before returning to Argentina on Saturday, April 16.

Schumacher reiterated the position of the German government not to interfere in Argentina's debt renegotiations with private bondholders. During the meeting, Schumacher also touched upon the issue of regional integration, calling the EU's favourable stance towards regional integration in Latin America as "a huge opportunity not to be missed.

"I don't see why the Mercosur would need 50 years to achieve what we did," he said, adding that regional cohesion, cultural and economic homogeneity was far greater than in the Europe of the ?50s. "Argentina should be happy that the EU wants to negotiate with a regional bloc (Mercosur), unlike the position of other superpowers," he said when asked about stalled EU-Mercosur talks and the preference of bilateral agreements between individual European and Latin American economies to regional agreements.

On the debt issue, Schumacher who said he came under fire from the nearly 50,000 German bondholders who hold about eight percent of Argentina's foreign private debt, stood by the conspicuous silence the Schröder government has adopted during Argentina's take-it-or-leave-it offer to restructure its 80-billion dollar debt with private bondholders.

"We don't take a stance on negotiations between private bondholders and the Argentine government," Schumacher said. Seventy-five percent of the German bondholders, Schumacher noted, ended up accepting the government's offer.

With the exception of some harsh words picked up by the international German broadcaster Deutsche Welle during a 2004 visit by German Finance Minister Hans Eichel saying German bondholders were deeply disappointed by Argentina's offer to repay around 40 cents per dollar loaned, Germany's neutrality on the issue has led Argentine officials and commentators to believe Germany will proceed on a conciliatory note in upcoming discussions with G7 members and the IMF.

When asked if he agreed with this assessment, Schumacher replied: "Why not?"

Germany, France and the United States have been the more benign G7 members in their stance toward Argentina's default exit strategy while Italy and Japan, pressured by their citizen bondholders, have tossed the ball onto the international political playing field.

Kirchner and his delegation, including his wife Cristina Fernández, Foreign Minister Rafael Bielsa, Cabinet Chief Alberto Fernández and Planning Minister Julio De Vido, are scheduled to arrive in Berlin on Tuesday. The visit will include talks with German Foreign Minister Joschka Fischer and the German President and ex-IMF director Horst Köhler.

The meeting between Kirchner and Köhler has triggered media attention as Kirchner is expected to discuss a viable strategy for Argentina to repay its outstanding 14-billion-dollar debt with the IMF. Kirchner and Köhler struck the last deal between Argentina and the IMF in 2003.

Schumacher described not only the Kirchner-Köhler relationship as cordial adding that German-Argentine relations on the whole are in good health.

"We were on Argentina's side, even in 2002, when Schröder came to visit when no one wanted to go to Argentina," he said. "That was a symbol of our willingness to help, and we will always back Argentina in the international realm." He added: "The problem is that we don't have a problem and what people like to talk about are problems."

Jan-Christoph Kolb ? Bs. Aires Herald