8/2/2014
Argentina's government once again denied that the country had defaulted payments after the failure of negotiations in New York over funds under dispute in U.S. courts
BUENOS AIRES – The Argentinean government once again denied that the country had defaulted payments after the failure of negotiations in New York over funds under dispute in U.S. courts.
However, the uncertainty proved too much for the financial markets which closed with sharp falls.
In an address to the country on national television on Thursday, President Cristina Fernandez said “the world keeps moving and Argentina too.”
“The world keeps moving and life goes on and Argentina too, which is good news,” Fernandez said.
She added that Argentina will use all legal means under the contracts signed with 92.4 percent of guarantors who resorted to the debt restructuring programs in 2005 and 2010.
“We don’t live in a hut, but in a country, in a nation that has a Congress which has the core authority to deal with the external debt,” she asserted.
Shortly before the intervention by the president, Economy Minister Axel Kicillof said that to talk about non-payment is a “whole lot of hogwash,” describing the ruling by New York judge Thomas Griesa in favor of the “vulture funds” as “an unprecedented ruling.”
“Argentina would be in default if any of the events considered and explained clearly in the contracts (signed with the creditors of the restructured debt) had occurred and none of them did,” he said.
The minister warned that “there is a kind of campaign aimed at sowing uncertainty, panic and terror linked to the word default,” and that the government will continue working in the face of it because there is “a lot to be done.”
“Default is when one does not pay and not when one can’t pay due to certain risks involved in the exchange, as is happening with the holdouts, and also for an entirely different set of reasons,” Kicillof said.
He added that Argentina will do all that is possible from a legal viewpoint “so that the exchange bondholders receive their money,” while holding Griesa, who has blocked the payments, responsible “for the actions of the bondholders.”
“Favoring the vultures seems to be one of the main goals of this judge,” he said.
Reiterating that Argentina deposited $539 million towards payment to the restructured creditors, Kicillof said that Argentina considered the bonds paid.
“That would be a closed question if the Bank of New York Mellon had not consulted judge Griesa. That money belongs to the exchange bondholders, let them rest assured.”
The economy minister said that Cristina Fernandez’s government “is not against an agreement between private actors,” in reference to a possible offer by Argentinean private banks to buy the debt from hedge funds or make a guarantee deposit.
“There are conditions for an agreement between private actors because the government cannot pay anymore to vulture funds and cannot participate in this type of arrangement,” he said.
The markets, that were buoyant a day earlier, responded negatively on Thursday to the lack of an agreement and after rating agencies Standard & Poor’s and Fitch put Argentinean debt in the “selective default” category.
Merval, the country’s stock exchange, registered a fall of 8.38 percent with a drop of up to 10 percent in the energy sector, which was the hardest hit.
Government bonds also fell by up to 8 percent.
The dollar, that barely rose by a cent in the formal market to 8.22 pesos per unit, jumped 27 cents in the informal market to reach 12.65 pesos.
“As was expected, after Wednesday’s sharp increases in anticipation of a last-minute agreement with the vulture funds, local assets recorded falls amid pending signs of a negotiation between private actors and also the hearing convened by Judge Thomas Griesa for tomorrow,” commented economist Gustavo Ber.
Argentina's government once again denied that the country had defaulted payments after the failure of negotiations in New York over funds under dispute in U.S. courts
BUENOS AIRES – The Argentinean government once again denied that the country had defaulted payments after the failure of negotiations in New York over funds under dispute in U.S. courts.However, the uncertainty proved too much for the financial markets which closed with sharp falls.
In an address to the country on national television on Thursday, President Cristina Fernandez said “the world keeps moving and Argentina too.”
“The world keeps moving and life goes on and Argentina too, which is good news,” Fernandez said.
She added that Argentina will use all legal means under the contracts signed with 92.4 percent of guarantors who resorted to the debt restructuring programs in 2005 and 2010.
“We don’t live in a hut, but in a country, in a nation that has a Congress which has the core authority to deal with the external debt,” she asserted.
Shortly before the intervention by the president, Economy Minister Axel Kicillof said that to talk about non-payment is a “whole lot of hogwash,” describing the ruling by New York judge Thomas Griesa in favor of the “vulture funds” as “an unprecedented ruling.”
“Argentina would be in default if any of the events considered and explained clearly in the contracts (signed with the creditors of the restructured debt) had occurred and none of them did,” he said.
The minister warned that “there is a kind of campaign aimed at sowing uncertainty, panic and terror linked to the word default,” and that the government will continue working in the face of it because there is “a lot to be done.”
“Default is when one does not pay and not when one can’t pay due to certain risks involved in the exchange, as is happening with the holdouts, and also for an entirely different set of reasons,” Kicillof said.
He added that Argentina will do all that is possible from a legal viewpoint “so that the exchange bondholders receive their money,” while holding Griesa, who has blocked the payments, responsible “for the actions of the bondholders.”
“Favoring the vultures seems to be one of the main goals of this judge,” he said.
Reiterating that Argentina deposited $539 million towards payment to the restructured creditors, Kicillof said that Argentina considered the bonds paid.
“That would be a closed question if the Bank of New York Mellon had not consulted judge Griesa. That money belongs to the exchange bondholders, let them rest assured.”The economy minister said that Cristina Fernandez’s government “is not against an agreement between private actors,” in reference to a possible offer by Argentinean private banks to buy the debt from hedge funds or make a guarantee deposit.
“There are conditions for an agreement between private actors because the government cannot pay anymore to vulture funds and cannot participate in this type of arrangement,” he said.
The markets, that were buoyant a day earlier, responded negatively on Thursday to the lack of an agreement and after rating agencies Standard & Poor’s and Fitch put Argentinean debt in the “selective default” category.
Merval, the country’s stock exchange, registered a fall of 8.38 percent with a drop of up to 10 percent in the energy sector, which was the hardest hit.
Government bonds also fell by up to 8 percent.
The dollar, that barely rose by a cent in the formal market to 8.22 pesos per unit, jumped 27 cents in the informal market to reach 12.65 pesos.
“As was expected, after Wednesday’s sharp increases in anticipation of a last-minute agreement with the vulture funds, local assets recorded falls amid pending signs of a negotiation between private actors and also the hearing convened by Judge Thomas Griesa for tomorrow,” commented economist Gustavo Ber.
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