Argentina’s negotiations with creditors to resolve a dispute over US$1.5 billion in unpaid debts remained deadlocked following talks on Friday, setting it on a course for a possible catastrophic default next week.
Argentina will default for the second time in 13 years if it cannot reach a deal with US hedge funds before Wednesday.
Daniel Pollack, the court-appointed mediator in the dispute, met with Argentine officials and in a statement released after the talks said that progress had not been reached. Pollack also said the Argentines were returning to Buenos Aires Friday night, but he expects more talks before the deadline.
Following a US judge’s order, Argentina cannot pay investors who accepted lower-valued bonds after its record US$100 billion default in 2001 unless it also pays off creditors who did not participate in previous bond swaps.
Argentine President Cristina Fernandez has long refused to negotiate with the plaintiffs led by New York billionaire Paul Singer’s NML Capital Ltd, who spent more than a decade litigating for payment in full, rather than agreeing to provide Argentina with debt relief.
However, Fernandez has been backed into a corner by NML Capital’s payment plan and has been sending a delegation to meet the negotiator in New York in hopes of averting a default.
The holdout creditors accuse Argentina of refusing to negotiate to provoke a default.
“Argentina’s government made clear that it will be choosing to default next week. Creditors arrived at the [debt mediator’s] office this afternoon prepared to negotiate and willing to be flexible in forging a solution,” NML spokesman Stephen Spruiell said in a statement on Thursday. “Argentina again refused to negotiate any aspect of the dispute.”
Paying the hedge funds that Fernandez often calls “vultures” in full would likely trigger lawsuits from other bondholders demanding to be paid on similar terms. Argentina’s government estimates that the liability could run up to US$15 billion.
With nearly US$29 billion in foreign reserves, Argentina appears to have the money to pay its bills, but those reserves include loans to other countries, deposits with the IMF and other assets that are not easily used. Take those away, and Argentina has about US$16 billion on hand.
Troubled countries often find bond investors willing to lend to them to pay other creditors, but Argentina has been locked out of the bond markets for more than a decade. Some investors would probably step up to lend it money, but at high interest rates — and at high political cost for the leftist government.
BACKLASH: The National Party quit its decades-long partnership with the Liberal Party after their election loss to center-left Labor, which won a historic third term Australia’s National Party has split from its conservative coalition partner of more than 60 years, the Liberal Party, citing policy differences over renewable energy and after a resounding loss at a national election this month. “Its time to have a break,” Nationals leader David Littleproud told reporters yesterday. The split shows the pressure on Australia’s conservative parties after Prime Minister Anthony Albanese’s center-left Labor party won a historic second term in the May 3 election, powered by a voter backlash against US President Donald Trump’s policies. Under the long-standing partnership in state and federal politics, the Liberal and National coalition had shared power
CONTROVERSY: During the performance of Israel’s entrant Yuval Raphael’s song ‘New Day Will Rise,’ loud whistles were heard and two people tried to get on stage Austria’s JJ yesterday won the Eurovision Song Contest, with his operatic song Wasted Love triumphing at the world’s biggest live music television event. After votes from national juries around Europe and viewers from across the continent and beyond, JJ gave Austria its first victory since bearded drag performer Conchita Wurst’s 2014 triumph. After the nail-biting drama as the votes were revealed running into yesterday morning, Austria finished with 436 points, ahead of Israel — whose participation drew protests — on 357 and Estonia on 356. “Thank you to you, Europe, for making my dreams come true,” 24-year-old countertenor JJ, whose
A documentary whose main subject, 25-year-old photojournalist Fatima Hassouna, was killed in an Israeli airstrike in Gaza weeks before it premiered at Cannes stunned viewers into silence at the festival on Thursday. As the cinema lights came back on, filmmaker Sepideh Farsi held up an image of the young Palestinian woman killed with younger siblings on April 16, and encouraged the audience to stand up and clap to pay tribute. “To kill a child, to kill a photographer is unacceptable,” Farsi said. “There are still children to save. It must be done fast,” the exiled Iranian filmmaker added. With Israel
Africa has established the continent’s first space agency to boost Earth observation and data sharing at a time when a more hostile global context is limiting the availability of climate and weather information. The African Space Agency opened its doors last month under the umbrella of the African Union and is headquartered in Cairo. The new organization, which is still being set up and hiring people in key positions, is to coordinate existing national space programs. It aims to improve the continent’s space infrastructure by launching satellites, setting up weather stations and making sure data can be shared across