Argentina Ignores U.S. And Enacts Law To Pay Reestructured Debt

The Government of Argentina managed to impose its parliamentary majority to push through a law that enables payment of the restructured debt in the country and intends to avoid the obstacles imposed by a the United States judge to pay off creditors.

After a session that started Wednesday and lasted for more than fourteen hours, the government took the project forward in Parliament and approved with 134 votes in favor, 99 against and 5 abstentions.

The initiative, which last week received the approval of the Senate, has prompted an intense debate between the government and the opposition.

In an announcement that took place in a climate of tension, the opposition rejected the bill on the grounds that it does not resolve the conflict opened by New York Judge, Thomas Griesa, in favor of hedge funds suing Argentina for the full payment of its debt.

“As we could not do it in New York, we proposed this law to pay the debt in Argentina, in France or wherever the bondholders want. Argentina‘s intention is to pay and fulfill our responsibility. This is the fundamental meaning of the law,” said deputy Roberto Feletti from the ruling Front for Victory.

Payments to creditors who agreed on the swaps, with which Argentina tried to solve the problem created by a billionaire default in 2001, have been in trouble after a United States judge issued an order to stop the process.

The judge ruled in favor of mutual funds that claim that Argentina owes $1,300 million, plus interest, for bonds in default since 2001. This decision was also ratified by the United States Supreme.

“The best procedure to get rid of judge Griesa is serving the sentence,” said Paul Tonelli, a member of the opposition Republican party, that rejects the government project.

Argentina provided to Bank of New York Mellon (BONY) funds for the last maturity of the restructured debt in June, but the entity that acts as an intermediary between the Argentine government and its creditors, did not make the payment to recipients because judge Griesa blocked the operation. The next due date for the Argentinian government will be later this month and the balance to be paid is  $200 million.

Luis R. Miranda is the Founder and Editor of The Real Agenda. His 16 years of experience in Journalism include television, radio, print and Internet news. Luis obtained his Journalism degree from Universidad Latina de Costa Rica, where he graduated in Mass Media Communication in 1998. He also holds a Bachelor’s Degree in Broadcasting from Montclair State University in New Jersey. Among his most distinguished interviews are: Costa Rican President Jose Maria Figueres and James Hansen from NASA Space Goddard Institute. Read more about Luis.