Argentina in the Shadow of the Vultures
September 03, 2014
Crushing Debt
Argentina in the Shadow of the Vultures
by EMILIANO GULLO
The Argentine government made another attempt to resolve the conflict over its debt on August 20, when President Cristina Fernandez launched a legislative proposal to make Buenos Aires the place of payment for creditors and in this way, get out from under U.S. legislation that has trapped the country in a financial-judicial labyrinth.
Now the government’s problem is internal: the opposition refuses to approve the law in Congress.
If the bill is approved, the Ministry of the Economy could be relieved of the contract with the Bank of New York, the financial institution in charge of part of the payment of the restructured bonds. A ruling from a U.S. court mid-June by New York judge Thomas Griesa in favor of the “vulture” investment funds granted them legal justification to demand payment in cash of the total face value of the bonds, plus interest, bought after the Argentinean default of 2001. Griesa blocked Argentina’s partial payment of the debt, insisting on full value to the funds that purchased the debt after Argentina’s crisis at a huge discount.
The project sent to the parliament sets forth three points: a change in the payment agent, the possibility of modifying the bonds through U.S. local legislation and deposit of the money to the vulture funds in the same conditions agreed on with the majority of the creditors in the swaps of 2005 and 2010.
In this case, it is not a matter of compensating workers who saved a little money to invest and have a more comfortable retirement, but rather of paying off giant investment banks that use money to buy up debts at ridiculous prices from countries that fell into bankruptcy, to later attempt to obtain astronomical profits through litigation.
More:
http://www.counterpunch.org/2014/09/03/argentina-in-the-shadow-of-the-vultures/
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