November 23, 2014
Default on alternatives
The opposition mostly took its time to define its stance on President Cristina Fernández de Kirchner’s initiative to repatriate foreign debt payments last Tuesday and now that the full spectrum has reacted, we are not much the wiser. City Mayor Mauricio Macri at least fired from the hip but his opinion was as superficial as it was swift — he likened the move to Argentina refusing to accept Germany’s triumph in last month’s World Cup final in Brazil, demanding a rematch here with judge Norberto Oyarbide as the referee. Yet his analogy does not hold water at any point — whether comparing Joachim Löw’s team with Paul Singer’s vulture fund or Manhattan judge Thomas Griesa with World Cup final referee Nicola Rizzoli (or Oyarbide with either), the comparison is ridiculous. On a more serious note Macri advocates simply paying up to the vulture fund creditors in compliance with Griesa’s ruling on the grounds that one or two billion dollars even to the wrong people is a small price for access to global capital markets — here he seems oblivious to the risks of the RUFO (“Rights Upon Future Offers”) clause or cross-default acceleration vastly multiplying the sums at stake (not to mention Nevada judges opening up completely new fronts).
The other main opposition voices were evasive in midweek, pleading prudence and the need to consult experts, but in the course of Thursday they defined their positions. Or did they? Thus Renewal Front leader Sergio Massa spoke clearly enough against the bill to repatriate bond payments and suggested alternative venues of jurisdiction in Europe to either New York or here but gave no further details on the grounds he wished to seek consensus with other parties — furthermore, the absence of former economy minister Roberto Lavagna (who regards default as a lesser evil, almost welcoming the chance to start again with an entangled debt restructuring) was striking while the rest of Massa’s economic team do not speak with one voice, ranging from Lavagna’s intermediate stance to virtual agreement with Macri (Martín Redrado) as well as optimism as to an eventual out-of-court settlement (Aldo Pignanelli). On the same day the Radicals also came out against the bill but they seemed to be talking only for themselves rather than the Broad Front-UNEN coalition as a whole (whose Libres del Sur member backs the government initiative while the Socialists lean towards abstention).
This editorial thus does little to offer a constructive alternative to CFK’s bill but if the opposition has any suggestions providing a clearer way out of the default deadlock, they would be very welcome.