© AFP

For Argentina, it all kicks off on Thursday. The country’s team under Lionel Messi – perhaps the world’s greatest player – is second favourite behind host Brazil to win the World Cup, the third time it would have done so. On the same day the US Supreme Court will consider a case that has pitched Argentina against a group of “holdout” creditors seeking repayment of $1.3bn of defaulted debt from Argentina’s sovereign default in 2001.

Separately, each contest will have an economic impact. But football and politics have become entwined in Argentina as the government is accused of using sporting glory to divert attention from a range of problems that includes one of the world’s highest inflation rates.

Jorge Capitanich, Argentina’s cabinet chief, recently expressed hopes that “people won’t talk about anything except football” during the tournament. Pablo Alabarces, an Argentine sociologist, said it was “a paradox that football does not have political consequences, but politicians remain convinced that it does”. He pointed in particular to the move by president Cristina Fernández effectively to nationalise football broadcasting five years ago by making games available for free alongside government adverts.

The stakes in the Supreme Court case are high. HSBC has warned investors to expect “a strong [market] rally in the case of a decision favourable to Argentina . . . and a strong sell-off if the petition is denied”.

While a resolution of the issue would allow the country to gain much-needed access to capital markets, a rejection could plunge the country into another debilitating default, heaping more misery on a malfunctioning economy that is expected to slip into recession this year.

Argentina’s high inflation rate is something the government appears to hope Argentines will forget amid the heat of the World Cup.

In depth

World Cup Brazil 2014

In depth World Cup: Brazil 2014
© Dreamstime

There is a growing perception in the host nation that money is being wasted on the tournament to the detriment of improved public services

It is assumed that sporting victories lead to spikes in consumption among jubilant supporters. But the tournament could actually exacerbate Argentina’s problems, as between 50,000 and 100,000 of its team’s fans flood in to Brazil, taking hard currency with them. The longer the national team stays in the competition, the greater the demand for dollars.

And that contingent will include the notorious “barras bravas”, or “tough gangs”, who are behind some of the worst football violence in the world, causing an average of five deaths a year in Argentina over the past three decades. Mrs Fernández once described them as “marvellous”, but their escapades in Brazil have the potential to add to her headaches.

Argentina could also find that its problems return with a vengeance after the final whistle. Scandal has engulfed Amado Boudou, the vice-president who is accused of abusing his power to gain control of a bankrupt banknote printing company. On Monday he became the first sitting vice-president since the military dictatorship fell in 1983 to be questioned over criminal allegations by a judge, who will now decide whether to proceed to trial.

Argentinian inflation
Argentinian foreign exchange reserves

These challenges come as Ms Fernández has notched up a string of achievements in her attempts to win back the confidence of international investors. The government recently signed a deal with the Paris Club of creditor nations to pay back $9.7bn in defaulted debt.

Some observers believe this could lead the Supreme Court to view Argentina more favourably, although a leaked memo from the country’s lawyers advising Buenos Aires to default should the court reject its case may have the opposite effect.

The government has also stabilised an alarming decline in its foreign exchange reserves, which last year fell by about $1bn a month.

It is not just the government that is hoping to cash in from the national team’s performance. The local operations of ICBC, a Chinese bank, is offering free instalments on loans to account holders for every World Cup match Argentina wins.

Even the barras – for whom football is as much a business opportunity as a sport thanks to their involvement in ticket touting and player extortion – will hope to use the World Cup to their advantage. For Argentina, more than most other countries, the World Cup is about more than just football.

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