BUENOS AIRES, Argentina (AP) — Argentina has finally run out of wiggle room in a billion-dollar showdown over foreign debts unpaid since the country's world-record default a decade ago, and the stakes couldn't be higher for President Cristina Fernandez.
If she doesn't reverse her longstanding position and pay up, she risks triggering another historic Argentine debt default, this time totaling more than $20 billion.
The U.S. Federal Reserve and the Clearing House, a trade group representing the world's largest commercial banks, told the judge to make sure his order won't affect the U.S. funds-transfer system, which automatically moves an average of $2.6 trillion a day in half a million transfers among more than 7,000 banks.
Requiring intermediaries to identify, stop and divert payments according to court orders "would impede the use of rapid electronic funds transfers in commerce by causing delays and driving up costs," the trade group said.
Sovereign debt is supposed to be paid no matter who runs a country, but Fernandez has always considered this defaulted debt to be illegitimate, forced onto the Argentines by dictators acting in concert with international financial speculators.
The debt relief granted by these "exchange bondholders" enabled Argentina to climb out of a deep economic crisis, and many analysts have described it as a model for Greece and other debt-burdened countries to consider now.
Exchange bondholders who collectively own $20 billion in the restructured Argentine debt had argued that they "already suffered tens of billions of dollars in losses," and that it's not fair to harm their already diminished returns so that a few holdouts can earn up to 200 percent on their original investments.
If she doesn't reverse her longstanding position and pay up, she risks triggering another historic Argentine debt default, this time totaling more than $20 billion.
The U.S. Federal Reserve and the Clearing House, a trade group representing the world's largest commercial banks, told the judge to make sure his order won't affect the U.S. funds-transfer system, which automatically moves an average of $2.6 trillion a day in half a million transfers among more than 7,000 banks.
Requiring intermediaries to identify, stop and divert payments according to court orders "would impede the use of rapid electronic funds transfers in commerce by causing delays and driving up costs," the trade group said.
Sovereign debt is supposed to be paid no matter who runs a country, but Fernandez has always considered this defaulted debt to be illegitimate, forced onto the Argentines by dictators acting in concert with international financial speculators.
The debt relief granted by these "exchange bondholders" enabled Argentina to climb out of a deep economic crisis, and many analysts have described it as a model for Greece and other debt-burdened countries to consider now.
Exchange bondholders who collectively own $20 billion in the restructured Argentine debt had argued that they "already suffered tens of billions of dollars in losses," and that it's not fair to harm their already diminished returns so that a few holdouts can earn up to 200 percent on their original investments.
 |
| READ THE ORIGINAL POST AT www.sfgate.com |