For Immediate Release
Hannah Shultz, Communications Director
email@example.com / (o) (202) 783-3566 x101 (m) (319) 541-7357
Argentina Responds to Supreme Court with Debt Swap Plan
WASHINGTON - In reaction to an adverse Supreme Court ruling against Argentina, President Cristina Fernández de Kirchner announced that Argentina would offer new bonds to its creditors governed under Argentine law. The proposed debt swap would involve the 92% of the country's creditors that agreed to restructure in the wake of the country's 2001 default. While the debt swap proposes an alternative for the South American country to avoid paying hold-outs, it fails to reverse the global implications on debt markets, debt restructuring and financial stability.
"Argentina may have a way to avoid paying the hedge funds but it won't change how the court precedent equips predatory funds with a powerful ruling to force the poorest countries into submission," stated Eric LeCompte, Executive Director of the religious anti-poverty organization Jubilee USA. "The impact of this ruling stretches far beyond Argentina."
SCROLL TO CONTINUE WITH CONTENT
Never Miss a Beat.
Get our best delivered to your inbox.
The hold-out creditors include hedge funds popularly referred to as "vulture funds" because they buy debt cheaply when a country is in financial distress. Then the predatory funds sue them for full payment when the country experiences recovery or has attained new assets earmarked for social investment. The International Monetary Fund, World Bank, United Nations and US government have all expressed concern about the impact of a ruling in favor of these funds. They have noted that the precedent set by this case could make it more difficult for developing countries to receive debt relief and lead to greater financial instability. Jubilee USA made these arguments in a brief on behalf of Argentina before the high court, representing nearly 80 faith communities and national religious and development organizations.
"Essentially, the ruling legitimizes this extreme behavior and makes it more profitable across the globe," said LeCompte. "Poor people and legitimate investors still lose the most with this ruling."
Read Jubilee's USA's filing urging the Supreme Court to take case.
Our pandemic coverage is free to all. As is all of our reporting.
No paywalls. No advertising. No corporate sponsors. Since the coronavirus pandemic broke out, traffic to the Common Dreams website has gone through the roof— at times overwhelming and crashing our servers. Common Dreams is a news outlet for everyone and that’s why we have never made our readers pay for the news and never will. But if you can, please support our essential reporting today. Without Your Support We Won't Exist.
Please select a donation method: