Argentine Congress approves debt restructuring bill
The Argentine Senate unanimously passed a bill this afternoon to restructure the nation's $195 billion public foreign debt, which officials say is unpayable under current terms.
The bill declares debt sustainability a “priority” and authorizes President Alberto Fernández to carry out a “restructuring of interest maturity services and capital amortization of public securities issued under foreign law.”
Under Fernández's predecessor, Mauricio Macri, Argentina's public foreign debt doubled and annual foreign interest payments ballooned from $5 billion in 2015 to $18 billion last year - with most new debt going to finance record capital flight.
The bill also gives the executive branch the authority to apply reductions in principal, or “haircuts” on over $100 billion in bondholder foreign debt.
“I cannot conceive of any reasonable model (without) significant haircuts,” Columbia professor and Nobel laureate Joseph Stiglitz recently noted. “It would be fantasy to think otherwise.”
Most Argentine bonds are, moreover, currently trading at around half their face value - a discount that dwarfs the likely proposed haircut (rumored at 20%).
Economy Minister Martín Guzmán is also currently in talks with the IMF, which lent Argentina $45 billion between June 2018 and August 2019.
Guzmán is reportedly seeking a repayment grace period of up to 4 years.
The loan, which the IMF's own board of advisers recommended against, was reportedly granted under pressure from U.S. President Donald Trump - who sought to shore up Macri's electoral chances.
Amid the deepest recession in two decades, Macri instead became the first president in Argentine history to be defeated for re-election.
At: https://translate.google.com/translate?hl=en&tab=wT&sl=auto&tl=en&u=https%3A%2F%2Fwww.pagina12.com.ar%2F245935-el-senado-aprobo-la-reestructuracion-de-la-deuda
IMF Director Kristalina Georgieva greets Pope Francis as Argentine Economy Minister Martín Guzmán applauds at right.
Georgieva, Guzmán, and Pope Francis discussed Argentina's debt crisis at today's Vatican Conference on Economic Solidarity.
