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Argentine Debt, Restructuring Increasingly Damaging, Study Says
Press Release
November 19, 2009

ATFA Co-Chair Shapiro Explores Taxpayer, Investor Costs U.S. and Worldwide

WASHINGTON--(BUSINESS WIRE)--Argentina's debt default and restructuring have imposed enormous and increasing costs on taxpayers and investors in the U.S. and worldwide, according to a new study by Dr. Robert Shapiro, a former Under Secretary of Commerce for Economic Affairs under President Bill Clinton and Co-Chair of American Task Force Argentina.

The study shows that Argentina's default and subsequent refusal to repay its lenders have imposed a net cost of $157.7 billion worldwide and $20.5 billion in the U.S. The report also demonstrates that Argentina's refusal to satisfy its obligations has been particularly damaging to some U.S. states, noting that the cost to bondholders, taxpayers and investors in New York alone approaches $2 billion.

The study "The Continuing Cost of Argentina's Debt Default and Restructuring for Bondholders, Taxpayers, and Investors in the United States and Worldwide" has been delivered to all 535 U.S. Senators and Representatives by ATFA Executive Director Robert Raben under a cover letter urging members of Congress to support the Judgment Evading Foreign States Accountability Act of 2009. The legislation, introduced by Rep. Eric Massa (D-NY) and co-sponsored by 25 of his colleagues, addresses Argentina's unprecedented refusal to honor contracts and repay outstanding debt to U.S. citizens. To view the letter, click here.

"If the Argentine government would negotiate in good faith with all creditors and settle its outstanding debts, the country could return to global capital markets, strengthen its economy and improve its standing in the international community," Dr. Shapiro said. "If President Kirchner won't resolve these debts because it's the right thing to do for U.S. citizens, then she should do it because it's also the smart thing to do for the Argentine people."

The Obama Administration has also indicated that persuading Argentina to satisfy its obligations to U.S. citizens is a priority. U.S. Secretary of State Hillary Clinton issued a letter in March 2009 pledging to continue to urge the government of Argentina to "abide by its commitments and normalize its relations with all creditors and investors."

During her confirmation process this year, the U.S. Ambassador to Argentina, Vilma Martinez, stated her intention to "encourage the government of Argentina to abide by its commitments and resolve these claims, thereby improving opportunities for American investors, facilitating Argentina's reintegration into international financial systems, and improving Argentina's ability to attract foreign direct investment."

Dr. Shapiro's study also found that a significant share of the costs have been placed on New York State, the center of the American money market and home to many bondholders. Direct net costs to New York bondholders have reached $903 million and indirect costs to New York taxpayers total $329 million. Total costs to New York bondholders, taxpayers and investors now total $1,981 million.

Click here to read the study.

Made up of an alliance of diverse organizations, ATFA's leadership includes Executive Director Robert Raben, a former Assistant Attorney General at the U.S. Department of Justice, and is co-chaired by The Honorable Robert J. Shapiro, former Under Secretary of Commerce for Economic Affairs in the Clinton Administration, and Ambassador Nancy Soderberg, Ambassador at the U.S. Mission to the United Nations in New York from 1997 to 2001.

For additional information on ATFA's activities, please visit www.atfa.org, or contact media@atfa.org, or +1-888-662-2382.

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