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France confirms Paris Club support

French President François Hollande, left, greets President Cristina Fernández de Kirchner at the Élysée Palace in Paris, yesterday. Fernández de Kirchner met with her French counterpart and discussed ways to tackle Argentina''s growing international debt.

CFK also thanks her French counterpart for country’s support at US Supreme Court

Argentina yesterday secured France’s support in negotiations with the Paris Club group of creditor nations, with talks over debt from an estimated US$9.5 million’s worth of defaulted bonds from the 2001-02 crash set to begin in late May.
“France wants Argentina to overcome its financial” problems, and “it is managing to do so,” French President François Hollande said at a joint news conference after meeting privately with President Cristina Fernández de Kirchner in Paris, adding: “We hope to be able to support Argentine negotiations with the Paris Club, because (a resolution) is in line with French interests, as it would allow for greater trade flow” between the countries.
Fernández de Kirchner was next to speak, and thanked Hollande for “the firm decision to support the country’s negotiations with the Paris Club, which will begin on May 28.” The date confirmed by the president for the negotiations was two days later than the one communicated by Cabinet Chief Jorge Capitanich at the start of the week.
“This will be beneficial not only to Argentina but also for all European companies,” she said. Sealing an agreement on the debt would allow European companies in Argentina greater access to public credit lines from their home countries.

Talks with the Paris Club are widely considered an important step toward settling the long-running debt dispute and paving Argentina’s re-entry into international credit markets.

Fernández de Kirchner also expressed gratitude for France’s support in the parallel debt case against Argentina primarily brought forth by international financier Paul Singer’s hedge fund, Elliot Management, which has taken the country to court over its 2002 debt default.

“I want to specially thank the French republic for presenting itself as an amicus curiae on behalf of Argentina before the United States Supreme Court (in July last year) over the demand of a tiny group of funds called holdouts, and also known as ‘vulture funds,’ which are attempting to knock down the agreement reached by Argentina with 93 percent of creditors in two debt restructurings in 2005 by President (Néstor) Kirchner and the other by the government of whom stands before you.

“A small part that does not represent more than US$1.3 billion pretends to knock over the most important sovereign debt agreement in the world, which is important for the whole world,” she added.

For trade’s sake

In their joint encounter, Fernández de Kirchner took pains to emphasize how much commercial relations between the two nations had grown over the last decade.

“In 2003, trade between Argentina and France stood only at US$300 million and marked a surplus for Argentina,” which “was still in default, there was no consumption, so trade was minimal,” Fernández de Kirchner continued, adding that “now after more than 10 years of sustained growth, we have reached a trade balance of US$2.6 billion, with a surplus of US$1.6 billion for France.”

Fernández de Kirchner used these numbers to emphasize why it was important for nations to back Argentina’s debt-restructuring efforts since economic growth can lead to increased trade.

Hollande also revealed “the president (Fernández de Kirchner) has expressed her desire for trade between the countries to increase in areas including transport.”

Setting an example

Before comparing the Crimean crisis with Malvinas (see below and page 12), Fernández de Kirchner compared Ukraine’s debt situation with Argentina’s — the countries are similar in size, population and natural resources.

“Ninety-nine percent of Ukraine’s GDP is committed to debt. What would happen to any other country with such levels of debt if the position of a small group of funds addressed at tax havens, which do not even pay taxes in their own home countries, would result triumphant?”

The head of state defined this hypothetical outcome as “an international debacle, and a moral and political crisis.”

Cultural footnote

Fernández de Kirchner was invited to France to inaugurate the Salon du Livre book fair, which she described as “one of the most important literary events in the world” (see also page 13).

The head of state said she was invited “at a very particular time, the year of the 100th anniversary of the birth of an Argentine writer who lived in France for great part of his life, Julio Cortázar.”

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