Argentina’s Government Threatens to Default on Its Debt

EspañolOn Wednesday, the Kirchner administration in Argentina threatened to default on its debt after declaring it would be “impossible” to repay its creditors by June 30. A US court decision put Argentina in a difficult position on Monday when it demanded the country honor its commitments.

The US Supreme Court refused to hear Argentina’s appeal and ordered the country to pay the hedge fund holdouts, upholding a lower court ruling by judge Thomas Griesa in New York. Furthermore, the Second US Circuit Court of Appeals lifted a temporary delay that was part of Griesa’s decision, demanding Argentina pay US$1.33 billion, plus interest, to the holdouts immediately.

The Argentinean Economy Ministry responded by saying, “The lifting of the stay by the Second Circuit makes it impossible to make the next payment on restructured debt in New York, and shows a complete lack of willingness to negotiate under conditions different from those dictated by Judge Griesa.”

The government of Argentina has said it remains willing to honor its debt, but cannot afford to repay the holdouts and also those who accepted the discounted agreement at the same time.

It said it remained willing to repay the bonds, except for the fact that the holdouts would have to be paid at the same time that those who accepted a discount return, something Argentina says it allegedly cannot afford to do.

Source: El País.

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