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Pressure from seven Obama congressmen for the bondholders
Clarin
May 22, 2009

A bill prohibits debtor States from financing themselves in the U.S.

by Ana Baron

"Argentina's friend" in the U.S. Congress, the Democratic Representative from New York, Eric Massa, yesterday did a U-turn and introduced, along with six colleagues, the first bill that, if approved, would impede Argentina from returning to the U.S. capital markets if the government doesn't pay amounts stipulated in rulings by Judge Thomas Griesa in the court of New York.

It also demands that the Argentine government must arrive at an agreement with U.S. bondholders that didn't enter the debt swap.

The bill, entitled "Judgment Evading Foreign States Accountability Act" and excludes from the U.S. capital markets any country that doesn't comply with judicial verdicts in the United States for more than US$100 million for more than two years.

Without a doubt, it represents a new legal problem for Argentina, because for the first time it penalizes state companies that in the courts of New York had managed to evade embargoes of their assets by arguing that they are separate from the government.

After having said during an interview with Clarin that he would help Argentina financially to be in better conditions to pay its debts, Massa did an about-face. The bill also requires the State Department or the Treasury to take into consideration that Argentina is a country that evades payment of judicial sentences before extending any financial assistance.

According to the bill, Argentina has 163 lawsuits in process in the courts of New York, of which 88 already have been decided in favor of the bondholders and vulture funds. According to one of those decisions, Argentina owes US$1 billion to the investment fund Elliot alone.

Argentina's ambassador to the White House, H ctor Timerman, showed himself to be very surprised: "Massa told me that he was working on his re-election, that he was seeking support for his campaign and that he wouldn't be taking on any foreign policy issues."

Massa, as with all of the other six representatives co-sponsoring the bill, represent New York in Congress, the state of Hillary Clinton, who also just came out in favor of Argentina paying its debts in a letter sent to ATFA the Argentine Task Force.

A source that asked not to be identified told Clarin that ATFA also helped Massa in the writing of this problematic bill.

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