Mediators between Argentina and the hedge funds that have been suing the country over around $1.7 billion in unpaid debts will come to the table in New York City on Wednesday.
This isn’t the first time they have met, but it is the first time the newly elected President of Argentina, Mauricio Macri, has said that his country’s mediators will seek a solution to the conflict.
“We don’t want to remain listed as a defaulter, we want to resolve all outstanding issues. Even though things haven’t been done well in the past, there’s now a change,” Macri said in a press conference reported by the Buenos Aires Herald.
“We’ll tell the mediator that there has been a change on how we look at our debts in Argentina.”
This lawsuit has locked Argentina out of international markets for 14 years. It goes back to Argentina’s default in 2001. The hedge funds, led by Elliott Management’s Paul Singer, bought Argentine debt for cents on the dollar, and refused to take a haircut on payments on that debt in 2005 and 2010.
For that, the Argentine government refused to pay them.
The holdouts, or “vulture funds” as they were often called by Argentina’s former President, Cristina Fernandez de Kirchner, took their suit all the way up to the Supreme Court. Argentina lost in the summer of 2014, and technically went into default.
That was Fernandez de Kirchner’s last year in office.
In the meantime, the Argentine economy suffered from high inflation and capital flight increased.
Macri ran on a platform of economic reform and liberalization, and in November he beat Fernandez de Kirchner’s candidate Daniel Scioli.
In the past, Argentina has said that it will negotiate, only to walk away from the table. We’ll see how this new government operates soon enough.