Argentine bravado has an unlikely ally in the UK taxpayer

YESTERDAY’s call by the President of Argentina, Cristina Fernández de Kirchner, for the UK to hand her the Falklands Islands was just the latest example of diplomatic sabre-rattling from Buenos Aires over the islands’ sovereignty.

Alas history hasn’t recorded whether David Cameron got as far as page 25 of The Guardian to read for himself the missive that Kirchner addressed to him. But he was right to insist that the Falkland Islanders themselves should retain the right to self-determination, and that they would have his full backing as long as they choose to stay with the UK. It’s unacceptable for another nation to repeatedly make hostile claims on British sovereign territory, and it’s hardly controverisial that anyone making such claims should expect short shrift from the UK.

Except that Argentina is not getting the cold shoulder from the Prime Minister and, in particular, the Department for International Development. Research published by the TaxPayers’ Alliance last year showed that British taxpayers’ money is effectively supporting the Argentinian government through loans doled out by the World Bank and affiliated institutions.

As of March 2012, outstanding loans to Argentina were worth $16.2bn (£10bn). Based on Britain’s shareholdings in the two responsible lending institutions, that means a total UK taxpayer stake in loans to Argentina of nearly $353.8m.

While no cash may have been sent directly from London, British money is underwriting borrowing by the Argentinian government: the same government which has spent money on ads in the British press demanding the “return” of the Falklands.

For some time, Barack Obama’s administration in the US has pursued a policy of voting against any new loans to Argentina at the International Bank for Reconstruction and Development (IBRD) and the Inter-American Development Bank (IADB), the two institutions lending to Argentina. It has done so in response to Argentina’s treatment of existing creditors. EU nations like Germany and even Spain have also opposed further loans to the country.

In the circumstances, you might expect the UK government would have joined them. Alas not. In all the meetings at which new loans to Argentina have been discussed at the IBRD and IADB, not once has the British representative cast a vote against such a proposal.

When I recently challenged the international development secretary Justine Greening on this matter, she insisted that “British decision-making in multilateral finance bodies is guided by economic and development principles”.

Many, however, would disagree. Such decisions should first and foremost be guided by Britain’s national interest. This is why we must press the government to oppose further loans to Argentina. And any City A.M. readers who agree can sign our petition at www.StopFundingArgentina.org.

Jonathan Isaby is political director of the TaxPayers’ Alliance.