Latin America

Judi Lynn

(160,545 posts) Fri Aug 1, 2014, 02:36 PM Aug 2014

Argentina in Default as 'Vulture Funds' Demand 'Predatory Payment'

Published on Thursday, July 31, 2014
by Common Dreams
Argentina in Default as 'Vulture Funds' Demand 'Predatory Payment'

US court's ruling on debt payback could have 'a significant negative impact on the functioning of international financial markets, as the International Monetary Fund has repeatedly warned,' a group of economists writes

by Andrea Germanos, staff writer

[font size=1]
Two vulture funds are "seeking exorbitant profits" for the Argentine debt it bought up at bargain prices. (Photo: Jubilee Debt Campaign)[/font]

Argentina fell in default on Wednesday following the collapse of negotiations between the country and "vulture funds" that are demanding full payment for the $1.3 billion in debt the funds bought up at bargain rates.

"We're not going to sign an agreement that jeopardizes the future of all Argentines," Argentina's Economy Minister Axel Kicillof declared following the meeting in New York City. "Argentines can remain calm because tomorrow will just be another day and the world will keep on spinning."

McClatchy reported that U.S. District Judge Thomas Griesa, the judge in the case,

triggered the possibility of a default when he ruled that Argentina had to pay the holdout creditors in full, then blocked the country’s plan to make a payment June 30 to other creditors who’d agreed to accept a 70 percent discount on the debt they held. Griesa said Argentina had to pay all the creditors at the same time. When Argentina missed the June 30 payment, that started the clock running on a 30-day grace period that ended at midnight Wednesday.

"Unfortunately, no agreement was reached and the Republic of Argentina will imminently be in default," court-appointed mediator Daniel Pollack said Wednesday.

President Cristina Kirchner's cabinet chief, Jorge Capitanich, told press in Buenos Aires, "If there's a judge who's an agent of these speculative funds, if the mediator is their agent, what is this justice you're talking about? There's a responsibility of the state here, of the United States, to create the conditions for the unconditional respect of other countries' sovereignty."

More:
http://www.commondreams.org/news/2014/07/31/argentina-default-vulture-funds-demand-predatory-payment

5 replies

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Highlight:

Argentina in Default as 'Vulture Funds' Demand 'Predatory Payment' (Original Post) Judi Lynn Aug 2014 OP

More whining from Argentina trying to justify their COLGATE4 Aug 2014 #1

...And you are whining in every DU post about Argentina. puchi Aug 2014 #2

I think they´ll have to pay or else? Socialistlemur Aug 2014 #3

If I understand correctly, if they pay the hold outs, the other bond holders could sue for the full Bacchus4.0 Aug 2014 #4

Whoops Socialistlemur Aug 2014 #5

COLGATE4

(14,732 posts)

1. More whining from Argentina trying to justify their

Reply to Judi Lynn (Original post)

Fri Aug 1, 2014, 03:22 PM

Aug 2014

refusal to pay legally incurred debt. Well, maybe they can gin up interest in another war on the Malvinas to distract public attention.

puchi

(7 posts)

2. ...And you are whining in every DU post about Argentina.

Reply to COLGATE4 (Reply #1)

Tue Aug 5, 2014, 06:55 PM

Aug 2014

...And you are whining in every DU post about Argentina. You must hate them so much...

Socialistlemur

(770 posts)

3. I think they´ll have to pay or else?

Reply to Judi Lynn (Original post)

Wed Aug 6, 2014, 06:05 AM

Aug 2014

This is a really interesting case. If they refuse to pay they won´t be able to borrow more money. And I don´t think the Chinese will allow their cash to fill the gap unless they get something in return. The Chinese seem eager to sign deals to get mines, steel plants, oil fields, and whatever else they can get so they can export raw materials to China. It´s a move in their project to create a giant Chinese empire with nations used as feeders of raw materials and food and consumer of goods produced by Chinese companies which benefit from the use of cheap non unionized slave labour.

Bacchus4.0

(6,837 posts)

4. If I understand correctly, if they pay the hold outs, the other bond holders could sue for the full

Reply to Socialistlemur (Reply #3)

Wed Aug 6, 2014, 09:39 AM

Aug 2014

amount too as there is a clause in the agreement with the Kirchner government and the bond holders that they could not make a better deal than the one they got. That clause expires beginning of next year. However, now that payments are frozen, the bond holders who agreed to restructuring could sue for full payment now. Lose-lose for Argentina unless they can ride out the next 6 months or so.

Socialistlemur

(770 posts)

5. Whoops

Reply to Bacchus4.0 (Reply #4)

Wed Aug 6, 2014, 09:52 AM

Aug 2014

Maybe they need to start borrowing from the Bank of the South? If not their only option is to sell a piece of Argentina to a Chinese corporation like Minmetals.

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