News Column

Business Analysis: Few in Congress are brave enough to cry for Argentina

June 29, 2014

Argentina has cash in the bank, but maybe not for much longer. US hedge funds that bought its debt for a song a few years ago are demanding that 100 cents on the dollar be repaid. They have run to the US courts to enforce their claim - to the dismay of Argentinians - and won. Now the clock is ticking. From tomorrow, there are 30 days to resolve the dispute, or a deal signed with 92% of creditors, who accepted losses several years ago, is void. The hedge funds, described by debt campaigners as vultures, will be in prime position to call in the $1.6bn owed. Other debtors, seeing this victory, will no doubt want the same.

A deal is likely. Without one, Buenos Aires will default again - which would set back years of progress and lock Argentina out of the global financial markets. The US government needs to set some clear rules to guide the courts and put the interests of the majority first - but there are no votes in Washington in rescuing leftist South American countries.

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Source: Observer (UK)

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