MercoPress. South Atlantic News Agency

Argentina complains about Italian “hostility”

Argentina admitted Friday that relations with Italy are at their “worst moment” and complained of continuous hostility from the Silvio Berlusconi administration, particularly in the several multilateral organizations.

The need to rebuild bilateral relations was the main issue addressed during a meeting between Argentina's Economy and Foreign Affairs ministers, Roberto Lavagna and Rafael Bielsa with fifty representatives from Argentina's large Italian community.

"The attitude of the Italian government is one of perpetual condemnation and systematic opposition" toward any initiative by international lending institutions that might favor Argentina, underlined Mr. Bielsa.

However he admitted that the deterioration of bilateral relations was motivated by "the Argentine debt restructuring process" which has been met with permanent resistance in Italy where a large number of sovereign bond holders have refused to accept the consequences of the 2002 default and swap operation. Argentina basically agreed to return 25 US cents for each one US dollar face value, which was accepted by almost 72% of bond holders.

"Never have relations with Italy been so bad", said Mr. Lavagna who asked the local Italian community to cooperate in trying to improve the situation.

Mr. Lavagna detailed that much of the problems can be tracked to the Italian government regulators and financial system for not having acted when such a large number of Argentine bonds were sold to small investors.

"The central problem here resides with the executive branch of the Italian government and, more specifically, with the Bank of Italy", emphasized Mr. Lavagna who contrasted the attitude of Prime Minister Berlusconi with that of the Italian Stock Market regulators and Parliament, who faulted the country's banks for steering middle class savers towards the Argentine bonds, a financial investment instrument more appropriate for large institutions and big individual investors.

The majority feeling among members of the Argentine Italian community was that even when many Italians has acquired the bonds and lost a lot of money, bilateral relations should be kept separate from this type of controversies.