The Argentine Economics Minister Axel Kicillof and the Foreign Minister Héctor Timerman were in Washington on Thursday to address a meeting of the foreign ministers of the Organization of American States (OAS) on the issue. The meeting passed a resolution supporting Argentina on the issue (Meeting of Consultation of Ministers of Foreign Affairs of the OAS Supports Argentina in the Restructuring of its Sovereign Debt OAS Press Release 07/03/2014):
The Secretary General of the OAS, José Miguel Insulza, referred to the theme of the meeting as one which “not only threatens the financial stability of that sister country. It also wreaks havoc with the sovereign debt restructuring mechanisms that have been developed over time, with the acquiescence of international lending agencies, to enable numerous countries to overcome their debt crises and embark once again on a path to growth.”
The situation represents “a triple paradox” continued the Secretary General. The first aspect, he explained, is that while in national economies there exists “the limited liability system, whereby an enterprise or corporation that files bankruptcy proceedings is liable only to the extent of its capital. Under no circumstances does the collection of its debts affect the wealth of its shareholders." Meanwhile, in the global economy, “no such limited liability exists.” Therefore, said the Secretary General, “the only possibility open to sovereign states for restructuring their debt is to reach collective agreements with their creditors, with the support of the international system.”
The second aspect of this paradox, explained the OAS leader, “is that efforts to establish a sovereign debt restructuring system that protects the legitimate interests of bondholders while at the same time ensuring that countries are not prevented by the overwhelming weight of their debt from growing and attending to the most pressing needs of their citizens, have now been undermined by a decision that declares that a creditor who accepts a renegotiation and a creditor who does not accept one must be repaid at the same time.”
“But the worst facet of the paradox is that, even though the governments of all our countries and the international organizations we have founded agree that an unjust aberration is being perpetrated, so far there are no signs of the tools needed to correct it,” said Secretary General Insulza, who welcomed that the Meeting of Consultation of the OAS once again served as the forum in which a key issue for the region was debated. The complete address of the Secretary General is available here. [my emphasis]
|When Nixon zombie judges attack: Nixon-appointed federal Judge Thomas Griega|
The US withheld its approval from the resolution: "The United States cannot support this declaration, and notes that the issue remains in the judicial process in the United States."
The Buenos Aires Herald reports in English, OAS supports Argentina position against hedge funds 07/03/2014:
Canada and the United States abstained from voting and were criticised by Foreign Minister Héctor Timerman.The restraint of the US in this issue is a bit of a mystery, one that Mark Weisbrot discussed in Who Shot Argentina? US News & World Report 06/24/2014.
“I appreciate the solidarity and commitment from Latin American and Caribbean countries. I do not quite understand the US’s position,” he said during a press conference after the meeting.
“I truly lament that two countries didn’t sign this well balanced document. The only thing it asks for is negotiations to be just and to allow us to pay.”
“For once we discuss a serious matter in OAS that could leave Argentina in a complicated situation and the US does not accompany the region’s will and consensus,” Timerman concluded, while saying this does not mean the relationship between these countries and Argentina is affected.
The Bank of New York (BoNY) is requesting the Nixon zombie judge to clarify the mess he left them with, holding a payment that Argentina has made to BoNY as its agent but the Nixon zombie judge won't allow them to pay to the bondholders who renegotiated their debt with Argentina. (Martín Ferreyra, Piden a Griesa que aclare cuál debe ser el destino del depósito de la Argentina Tiempo Argentina 03.07.2014)
Here are some recent reports from TV Pública argentina on the fight. Visión 7 - Timerman y Kicillof a la OEA 03.07.2014:
Visión 7 - La OEA respalda a la Argentina contra los fondos buitre 03.07.2014:
The following two reports are longer. Visión 7 - La OEA respaldó a la Argentina 03.07.2014 (27 min)
Visión 7 - Kicillof en la OEA (1 hr, 6 min)
Linette Lopez in makes a polemic in favor of the Nixon zombie judge's decision that has caused the current dilemma, Argentina Is Getting Exactly What It Deserves Business Insider 07/03/2014.
Charlie Devereux has a description of the issue in Bloomberg News, Argentina Seen Breaking Vows as Fernandez Legacy at Risk 07/02/2014