December 21, 2014
Argentina to present debt restructuring regulation project before UN
Economy Minister Axel Kicillof and Foreign Minister Héctor Timerman have announced Argentina will present on September 9 a project before the United Nations aimed at regulating international debt restructurings and avoiding “vulture funds’ attack on sovereign nations.”
The project was proposed by Argentina and backed by nations gathered in the G77 group and China, among others. It states that if two thirds of bondholders accept restructuring terms, the rest of bondholders must accept them as well.
“The UN will discuss a project proposed by Argentina to regulate vulture funds,” Timerman announced from the Government’s House Conference Room.
“Argentina has become what is called a ‘leading case’ in the matter of how vulture funds can attack a country’s finance. Three billionaires and a judge are trying to bring down a whole country’s debt restructuring,” Kicillof explained.
The Economy Minister said the world cannot accept this kind of “extortion” towards sovereign nations and needs to regulate “vultures” activities as they affect the “whole international financial system.”
“Griesa’s actions cannot happen again. Singer’s actions cannot happen again. The ICMA [International Capital Market Association] has recognized this. Everyone has recognized this,” he said.
Kicillof added Argentina needs to apply the new regulation to be discussed in the UN to Griesa’s ruling.
“His [Griesa’s] interpretation of the pari-passu clause makes no sense. Vultures have made it a loophole to profit from. In his interpretation, a country cannot restructure its debt, as no one will ever agree to exchange their bonds if holdouts have to be paid fully,” he said.
“I know it will take some time, but as everyone agrees on this matter the new regulation should be applied to Griesa,” he concluded.
Meanwhile, Kicillof seized the opportunity to question Argentine political opposition’s attitude towards the government-sponsored "Sovereign Payment" bill, which aims at changing payment venue to be able to fulfill obligations to exchange bondholders after Griesa's adverse ruling.
"During this week's discussions in the Senate the opposition lacked a positive attitude. They did not make any proposals. It was very disappointing," he said.