News Center

Eating their words
The Economist
March 31, 2010

The government tries to make peace with international capital markets

BACK in 2005 when he oversaw a deal to restructure some $82 billion in bonds on which the country had defaulted four years earlier, the country's then president, N stor Kirchner, hung tough. The government offered new bonds worth only about 35% of the old ones. This prompted creditors with around a quarter of the debt to hold out for better terms, even though Mr Kirchner ordered Congress to pass a law forbidding any further payment. The creditors obtained court orders barring Argentina from raising fresh debt in international markets. But the economy was recovering strongly, and the world was awash with liquidity: the government managed to sell bonds worth $8.5 billion in the local market and $7.6 billion to Venezuela, albeit in some cases at high interest rates. It even paid off the IMF, partly to avoid being forced to deal with the holdouts.

That was then. Mr Kirchner's wife, Cristina Fern ndez, who succeeded him in 2007, is in difficulties. Recession, from which Argentina is now recovering, pushed the public finances into the red. The Kirchners' hopes of holding on to power at a presidential election due next year are threatened by their unpopularity. Venezuela's Hugo Ch vez has financial problems of his own. Argentina is feeling the price it has paid for excluding itself from the world financial system.

For full text of the article, visit: http://www.economist.com/world/americas/displaystory.cfm?story_id=15816832

U.S. Government
Takes Action

Click here to view letters by the Administration and Members of Congress on Argentina's debt and economic policies.

The Debt and Europe

Click Here To Read More

ATFA Member Spotlight

Resolution on Argentina's Generalized System of Preferences Status (GSP)

Click here to view other ATFA member activity

Join Us
Show your support for ATFA and our work regarding debt default by joining our growing list of supporters.

Tell Your Friends
Do you have friends or colleagues who would be interested in supporting ATFA? Send them an invitation to this site by clicking here.