WorldArgentina in Last-Ditch Effort to Avert Default
Argentina in Last-Ditch Effort to Avert Default
BUENOS AIRES, Argentina (AP) -
Argentina’s government said Monday it will make another effort to reach a deal with U.S. creditors ahead of a looming deadline that risks sending the country into its second default in 13 years.
Cabinet Chief Jorge Capitanich said that an Argentine delegation will travel to New York and meet a court-appointed mediator there on Tuesday, just a day ahead of the deadline.
“Argentina’s position is to reach a dialogue that establishes fair, legal and sustainable conditions for negotiation with 100 percent of the bondholders,” Capitanich said in a press conference.
But the mediator, Daniel A. Pollack, said in a statement that while the Argentines will meet him, they have not yet accepted his recommendation of face-to-face talks with the plaintiffs in the dispute, led by New York billionaire Paul Singer’s NML Capital Ltd.
Those creditors bought Argentine bonds on the cheap and rejected the government’s restructuring offers following its record $100 billion default in 2001. They are demanding payment of some $1.5 billion in unpaid debts.
By Wednesday, Argentina has to make a payment to creditors who accepted the restructured bonds or fall into default. But U.S. federal District Judge Thomas Griesa has forbidden Argentina to pay them without paying the holdouts as well.
In June, he ordered Bank of New York Mellon Corp. to return to Argentina $539 million it had deposited to pay holders of restructured debt.
Argentina already is struggling with recession, a shortage of dollars and one of the world’s highest inflation rates. But the government says default would have no effect on most Argentines.
“There’s no link to the economic activity. It’s independent to the evolution of these restructuring processes,” Capitanich said, adding that Argentina’s cash flow is guaranteed by the surplus in its trade balance and recent investment deals with China.
Restoring Argentina’s sense of pride and sovereignty after the 2001-2002 economic collapse has been a central goal of Fernandez.