Photo: AP Images
Yesterday, Argentina won a substantial victory when a New York Appeals Court ruled that its legal battle with hedge fund billionaire Paul Singer would continue on without the country having to make a $3 billion payment to bond holders on December 15th.You would think that Argentina’s President, then, would be breathing a sigh of relief.
Instead she’s breathing fire.
Throughout her country’s lawsuit with Singer and other holders of Argentina’s 2001 sovereign debt, President Cristina Fernandez de Kirchner’s rhetoric has always been… heated. She calls the group of plaintiffs “vulture” fund managers because they did not take a haircut and restructure their debt (as others did) when they had the chance in 2005 and 2010.
We’ve explained how, to Fernandez de Kirchner and her late husband, former President Nestor Kirchner, this is a matter of national sovereignty. She has vowed never to pay the “vultures.”
It’s a powerful narrative for a President who has seen her popularity plummet by half in the last year. And as the Appeals Court in New York was deciding her favour, Fernandez de Kirchner was widening the divide between her country and the powers that, she believes, encroach on its liberty.
At an Argentine Industrial Union conference yesterday, with Brazilian President Dilma Rousseff at her side, Fernandez de Kirchner reiterated that was right to only pay bond holders that took the opportunity to restructure, and drew a line in the sand between her country and its perceived oppressors (from MercoPress):
“We constitute the counter model of a world where the financial capital has become king and master and wants to punish us…”
“It’s inconceivable” that a court of New York should have ruled “against a country which restructured 93% of its sovereign debt and has been paying regularly. We have been paying on date since 2005 to the last cent with resources of our own and we’ll keep on paying to honour our country’s obligations”.
“Part of our self-esteem is to honour our obligations knowing that the country is the counter model of the IMF recommendations and precisely to show a greater willingness to reach an agreement and to pay we reopened the debt swap in 2010 until we reached 93% of restructured bonds”, said Cristina Fernandez adding that the Monday presentation before the Appeals court in New York was “another evidence of our good will”.
The president explained that “the heart of the Monday presentation was that what the New York court was demanding is not a ‘pari pasu’ which means equal conditions in legal terms, but rather ‘an absolute unfairness’ towards the 93% who did accept the debt swaps in 2005 and 2010″.
“Yes we were broke in 2003, but with faith and effort and the reindustrialization of the country and developing our domestic market we moved forward and have been successful. Maybe that is why we are the counter model” insisted the president.
Hugo Chavez much?
It should be noted that the Appeals Court ruled in Argentina’s favour only because of those 93% of exchange bond holders. They argued that it was unfair that they should take a 70% haircut while Singer got 100 cents on the dollar and have moved to enter the case as interested non-parties.