The press
Hopalong Sitafence
Paul Johnson
Odd to think that only a few weeks ago Margaret Thatcher was secretly ar- ranging for Ronald Reagan to address both Houses of Parliament in the honourable splendour of Westminster Hall. After the eclipse of Carrington, Reagan's image has been the first major casualty of the Falklands crisis, particularly on the Right where he was once esteemed as a good guy. Cummings's cartoon in the Sunday Express had him saying to a soaked Mrs Thatcher: When it stops raining I'll lend you my um- brella — I'm a pal.' Beneath it, her favourite back-bencher, George Gardiner, howled about our 'great US ally quivering like a jelly, frightened of saying or doing anything that might offend a couple of South American dictators'. It is true that some have sought to put a more favourable Construction on Reagan's policy. Henry Brandon, the Sunday Times Washington correspondent, explained that 'even- handedness', the current cant term for refusing to side either with fascist aggressor or democratic victim, was 'born as a tactical expedient, not a basic policy'. It was agreed, he wrote, that the 'role of a go- between only had a chance on the basis of the US playing a neutral role. Mrs Thatcher Is given credit here for gracefully accepting this policy.'
More typical, however, was Angus Mac- Pherson in the Daily Mail, also reporting from Washington: 'Reagan is a man who Came to office promising a new morality, both in America's lifestyle and its interna- tional dealings — an end to appeasement and toleration of aggression. He has wound up shrugging off the most naked piece of aggression since Russia invaded Afghanistan.' Macpherson added that some Reagan critics believe 'he may even have triggered off the Falklands invasion by his courting of Galtieri', leading the Argen- tine brasshats to think 'they were so badly needed they could get away with anything'. Geoffrey Smith, in The Times, took it for granted, as did most commentators and Journalists reporting on America's role in the crisis, that US opinion was behind Bri- tain rather than Reagan. The President, he thought, risked 'a foreign policy failure' and 'might have to serve out his last two Years as a lame duck President, with a gener- al assumption that he either would not stand again or would not be reelected if he did'. Peregrine Worsthorne in the Sunday Telegraph, however, warned the British not to be misled by the American media support for their cause, since the American Media have always got Mr Reagan wrong'. power in America, he argued, 'has shifted away from the East Coast, to the South and the West', and so away from the 'Atlantic-minded editorial writers' of the posh papers: 'If one wants to know what the new rulers of America feel it is wise to assume that it is the exact opposite of the veiws expressed in the New York Times and Washington Post.' To the South and West `what happens in Central and South America is much more important than what happens in Western or Eastern Europe.' In- deed 'in California and Texas, from where the present American rulers come, Spanish can be heard almost as much as English, and Mexico looms far larger than Britain'. To which Woodrow Wyatt retorted in the Sunday. Mirror: 'Large chunks of Texas, the whole of California and the USA's state of New Mexico are really Mexican. They were stolen by the USA in the Mexican war of 1846-48.' Suppose Mexico, he added, `now tried to get them back by force. The USA would rightly expect us to support her. We would instantly. It's now too late to reopen issues settled so long ago. Ditto the Falkland Islands.' In fact, reported Henry Brandon, many of the Californians in the Administration were 'traditional in- ternationalists who are pro-British'. They included William Clark, Reagan's national security adviser and Caspar Weinberger, the Secretary of Defence, 'who has so far been disinclined to side openly with the British cause to avoid accusations of in- terfering with the peace efforts of his fre- quent antagonist, Haig'.
What is clearly worrying the Americans, apart from the tricky hemispheric aspects of the crisis, is the effect a prolonged drama could have on the international financial system. So far financiers have proved better informed than diplomats. The Observer's Jack Lundin reported that the intelligence service of the merchant bankers, Schroder Wagg, was so good that it secretly transfer- red its entire 'Argentine loan book' from London to its Zurich subsidiary on 1 April, thus anticipating not only the invasion the following day but the British trade ban and the Argentine blocking of loan payments to British banks. That was smart, but of course the real problem is not just getting Argentine money but whether there will be any Argentine money to get. The Observer reported that the peso, 2,000 to the US dollar in 1981, was trading unofficially last week at 20,000 to the dollar, and 'the doors of the world's banks are shutting to Argen- tine borrowers'. It could no longer raise in London the $7 billion it needed to service its $32 billion debts; Wall Street was unsym- pathetic and its new ally, Russia, not only had nothing to lend but was 'actually seek- ing six months' credit from a financially desperate Argentina for their grain and meat purchases'. The Sunday Times feared that sanctions might 'force Argentina to renege on its loan payments so comprehensively that banks cannot pretend otherwise and call a default'. The trouble was that 'the Argen- tine problem follows 18 months of ac- cumulating shocks to the system, most notably in Poland'. An Argentine default, wrote the Financial Times, would be 'manageable if it were an isolated event. The danger is that it would not be isolated'. Beyond Poland and Argentina with their 'potential bad debts of well over $50 billion' stood 'a long line of potential disasters among the communist economies, the developing countries, and some of the newly-impoverished oil producers'. The new international factor was 'the collapse of the Opec surplus' which has cut off the flow of new deposits. The 'so-called "triumph" of re-cycling' was turning out to be another 'episode of unsound banking'. I've read many alarming things in the papers since the crisis broke but I'm not sure that this moderately-phrased FT leader wasn't the most chilling. Awful to think of Galtieri's little aggression turning out to be the financial Sarajevo of the world economy. Where would. Reagan's 'even- handedness' be then?
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