Argentina's $95bn default more than a decade ago came in the midst of a wrenching financial and political crisis, after the International Monetary Fund withdrew financial support and the government decided it could no longer afford to prop up the value of the peso, which was pegged to the dollar. After years of fraught negotiations with investors, more than 90% signed up to a drastic writedown of more than 70% on the value of their debts in two separate deals in 2005 and 2010, which cleared the way for Argentina to return to international financial markets.An American judge has ordered Argentina to pay them:
But with no agreed international process for handling the bankruptcy of a state, the consequences of Argentina's default have played out over more than a decade, through scores of separate court rulings.
Elliott Capital Management and Aurelius Capital Management, regarded as "vulture funds" by Buenos Aires, won a ruling in a New York court on Wednesday that could force Argentina to hand over $1.3bn (£816m) in repayments and interest to the tiny minority of bondholders who refused to sign up to a hard-fought writedown of its debts after the country defaulted in 2001.As the article explains, Argentine President Cristina Fernández intends to keep fighting it.
Judge Thomas Griesa upheld his own ruling of last month backing Elliott Associates, and said: "Argentina owes this and owes it now."
This is a good characterization of this situation:
Nick Dearden, director of the Jubilee Debt Campaign, said: "It is completely outrageous that the intransigence of a couple of speculators can bring a sovereign nation to the verge of bankruptcy. These vulture funds never lent money to Argentina – they gambled on a crisis that caused enormous poverty and suffering in that country."Tags: argentina, cristina fernández
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