Archive for the ‘Argentina’ Category

Argentine Workers in National Strike as Economic Woes Mount

| August 29th, 2014 | No Comments »

By Charlie Devereux

Argentine labor unions are staging a second national strike in less than five months as July’s bond default threatens to fuel inflation and undermine growth.

Truckers, train conductors, port workers and waiters walked off their jobs today in a 24-hour strike to demand higher wages and in protest at dismissals. While strikers blocked some of the main entrances to Buenos Aires, most bus and metro services worked as normal, according to TV channel TN.

“There’s a great desire to take part and show the government that people are fed up, tired and seeking answers to these demands that haven’t been met,” Hugo Moyano, secretary general of the General Workers Confederation and a former government ally, told reporters yesterday.

President Cristina Fernandez de Kirchner, who has defied a U.S. court order to pay $1.5 billion to holders of defaulted bonds, faces growing social discontent as ... Read More

Argentina’s Low Foreign Reserves Hit Peso

| August 29th, 2014 | No Comments »
Wall Street Journal WSJ-01 By KEN PARKS

BUENOS AIRES—Argentina’s international reserves are starting to dwindle in the wake of the country’s second sovereign-debt default in almost 13 years, putting added stress on the peso and an economy believed to be in recession.

The default has hurt a country already racked by stagflation, the rare but toxic combination of weak economic growth and high inflation. Argentina’s reserves are falling due to capital flight, debt payments and currency-market intervention, spurring fears that the country eventually will run out of the cash it needs to pay creditors and buy imports, a situation that could bring the economy grinding to a halt.

The Argentine peso, traded on a tightly regulated official market, has slipped from 8.20 per dollar before the July 30 default to 8.4010 at Wednesday’s close, its biggest slide since a devaluation of the currency early this year. The decline came even as the central bank’s stockpile ... Read More

Frustrated Judge Scolds Argentina but Does Not Hold It in Contempt

| August 22nd, 2014 | No Comments »
The New York Times


A federal court judge said on Thursday that Argentina’s attempt to skirt one of his rulings was “lawless” but stopped short of finding the country in contempt of court.

Exasperated lawyers for a group of New York hedge funds that are seeking more than $1.5 billion in bond payments that Argentina has refused to pay pleaded with the judge to take a harsher stance.

In a heated moment, one of the lawyers, Robert A. Cohen of Dechert, even went so far as to propose monetary and other sanctions that would “bite the republic in a way that will make the republic pay.”

Judge Thomas P. Griesa of the Federal District Court in Manhattan held the emergency hearing on Thursday at the request of the hedge funds’ lawyers after Argentina’s president, Cristina Fernandez de Kirchner, announced on Tuesday that her ... Read More

Fernández support wanes as Argentines focus on everyday concerns

| August 22nd, 2014 | No Comments »
Financial Times


At a gathering of hardline supporters of Argentina’s president, Luis D’Elía’s voice cracks with emotion as he celebrates Cristina Fernández’s refusal to pay the group of creditors branded the “vulture funds”.

“Much worse than the vultures abroad are the vultures within,” the social activist tells the crowd, referring to domestic opponents who have criticised Ms Fernandez’s decision not to pay the “holdout” creditors, which pushed Argentina into default for the eighth time in its history.

After the default, support for Ms Fernández swelled on the perception that she was standing up for Argentina’s interests against an enemy that, in Mr D’Elía’s eyes, threatens to undermine the country’s stability and represents the worst of “savage” capitalism.

But amid fears that the default will aggravate a deepening recession, with job losses and shop closures increasingly dominating headlines, the big question is how long the government can survive without cutting a deal with the holdouts, ... Read More

Argentina Moves to Pay Exchange Bondholders In Argentina

| August 20th, 2014 | No Comments »
Wall Street Journal WSJ-01


Three weeks after defaulting on its debt, Argentina moved to circumvent a U.S. court order by offering a bond swap that would let it pay bondholders in Argentina instead of in the U.S.

In a late night speech, President Cristina Kirchner said she would seek congressional approval to make payments on foreign bonds here instead of in the U.S., where a court last month blocked a bid by Argentina to pay its bondholders.

The offer would allow bondholders to swap bonds issued under foreign law for bonds issued under Argentine law, according to a copy of the bill submitted to Congress.

“This is an option bondholders have. It’s not an obligation because we can’t impose obligations on them according to our contracts. Our contractual obligation is to always guarantee that they can collect,” Mrs. Kirchner said.

If approved by Congress, the government would deposit payments on the new Argentine bonds in ... Read More

Argentina Expanding Russian Exports Thanks To Putin’s Spat With U.S., Europe

| August 12th, 2014 | No Comments »

The government of Argentina said Monday that it will expand exports to Russia by taking advantage of “the opportunity” created by Vladimir Putin’s ban on importing food and raw materials from the United States and the European Union in retaliation for sanctions imposed on Moscow by Washington and Brussels.

“Russia has a significant need for food products and the Argentine Republic can supply them,” cabinet chief Jorge Capitanich said during his regular press conference.

Argentina “will create the conditions so the private sector, with the backing of the government, can increase exports and satisfy the demand of the Russian market,” he said.

The relevant government ministries will establish “mechanisms to allow specific trade missions to take advantage of the opportunities created by this additional market opening,” the cabinet chief said.

The Russian government decreed last week a ban on imports of raw materials and ... Read More

Gobierno de Argentina demanda a EEUU ante la Corte Internacional

| August 8th, 2014 | No Comments »
El Nuevo Herald

BUENOS AIRES – La decisión de Argentina de recurrir ante la Corte Internacional de Justicia en la Haya las decisiones de los tribunales estadounidenses sobre la reestructuración de su deuda tensa sus relaciones bilaterales.

Argentina ha sido un aliado de Estados Unidos a lo largo de los años, pero con graves disensiones en momentos concretos, más frecuentes desde comienzos de este siglo.

Desde las presidencias de Juan Domingo Perón hasta las de Raúl Alfonsín, Washington negoció con vehemencia con Argentina el desmantelamiento de su programa nuclear, que consiguió finalmente.

La adhesión de Argentina al Movimiento de los Países No Alineados también fue objeto de roce entre ambos estados. En septiembre de 1991, el presidente Carlos Ménem anunció la retirada de su país de este grupo y, desde entonces, Argentina mantiene el estatuto de observador.

En el 2003, la guerra de Irak hizo resentirse las relaciones ... Read More

Argentina Sues U.S. in International Court of Justice Over Debt Dispute

| August 8th, 2014 | No Comments »
Wall Street Journal WSJ-01


Argentina has asked the International Court of Justice to hear a lawsuit it wants to bring against the U.S. in a high-stakes legal battle between the South American nation and some of its creditors over unpaid debts.

Argentina’s petition says that decisions by U.S. courts in the dispute have violated its sovereignty, The Hague-based tribunal said Thursday.

However, the U.S. would have to accept the International Court of Justice’s jurisdiction for a lawsuit to move forward, something that has happened in only 22 cases since the tribunal began working in 1946.

The Obama administration is unlikely to grant the request in the absence of a bi-lateral treaty that would require the U.S. to accept the court as a venue to hear disputes with Argentina, said Paz Zarate, an international law expert at Oxford Analytica.

“From the point of view of the U.S. government, the New York court system has dealt with a ... Read More

Argentina admite que la crisis por pago de deuda afecta al país y prepara medidas

| August 7th, 2014 | No Comments »
El Nuevo Herald

BUENOS AIRES – El ministro de Economía argentino, Axel Kicillof, admitió el miécoles que el conflicto abierto con fondos especulativos por el pago de deuda soberana en mora desde el 2001 afecta al país y anunció que preparan nuevas medidas económicas.

Mientras que la agencia Moody’s puso en negativo la perspectiva de la calificación de depósitos bancarios argentinos por el “debilitamiento del entorno” a consecuencia del “default (cese de pagos) de Argentina”, informó la calificadora.

“Esa es una batalla que por supuesto afecta a la Argentina pero tiene implicancias para el sistema financiero mundial muy complejas”, dijo Kicillof en Radio del Plata.

“No voy a negar dificultades. Las dificultades reales, como lo es el crecimiento del comercio internacional a un 2.1% el primer trimestre del año, cuando era del 4% en el 2013. Hay una desaceleración brutal. Donde haya un problema va a haber un gobierno ... Read More

Argentina: Unresolved debts

| August 7th, 2014 | No Comments »


It was a sweltering evening in Manhattan last week when Axel Kicillof, Argentina’s economy minister, confronted the cameras to insist his country had not defaulted on its international bonds for the eighth time in its history, but instead had suffered a “freak occurrence”.

Only minutes earlier Standard & Poor’s, the rating agency, had declared Argentina in “selective default”. Ramming the point home, a court-appointed mediator then released a statement halfway through Mr Kiciloff’s lecture saying that negotiations in New York between the minister and a group of holdout creditors to stop the default had failed.

The semantic disagreement over “default” is just one of the confusions thrown up by what has been dubbed “the sovereign debt trial of the century”. Another is why Argentine bond prices have held up at about 80 cents to the dollar. Even allowing for the continuing market “melt-up”, that stands in sharp ... Read More

Menor demanda externa reduce crecimiento de América Latina

| August 5th, 2014 | No Comments »
El Nuevo Herald


SANTIAGO – La menor demanda externa de materias primas por parte de los socios de América Latina y el Caribe, principalmente China, llevó a Cepal a reducir su estimación del crecimiento de la región de 2.7% a 2.2% en el 2014.

A la menor demanda externa se suma “un bajo dinamismo de la demanda interna, insuficiente inversión y un limitado espacio para la implementación de políticas que impulsen la reactivación”, sostuvo la Comisión Económica para América Latina y el Caribe (Cepal) en un informe económico presentado este lunes.

El menor crecimiento de China es “el principal riesgo” en lo que queda de año para los países de la región exportadores de materias primas.

En tanto, el crecimiento de Europa y Japón, otros importantes socios comerciales de Latinoamérica, caerá de 0.5% a 0.2% y de 1.7% a 1.4% respectivamente, lo que también significará una menor demanda de las ... Read More

What the heck is going on with Argentina?

| August 5th, 2014 | No Comments »
From CNN


Argentina, South America’s second-largest economy, has defaulted for the third time in 25 years. It can’t pay its bills — or, at least, it is refusing to pay its bills.

Here are the answers to some questions you might have about the whole mess:

1. How did things get so bad? Back in 2001, Argentina’s economy was in much worse shape and it defaulted on $100 billion in debt.

Over the next few years, Argentina convinced more than 90% of its creditors — the “exchange” group — to accept new bonds worth a fraction of the old ones. But a small group of so-called “holdouts” didn’t take the deal and sued for full payment.

Argentina stopped giving money to the holdouts, but it did continue to pay back the exchange group.

Fast-forward to 2012, and a federal judge out of Manhattan named Thomas Griesa ruled that Argentina has to pay the holdouts if it ... Read More

Argentina Loses Bid to Oust Debt Dispute Mediator

| August 5th, 2014 | No Comments »
Article originally appeared in the Associated Press


A U.S. judge on Monday turned back an effort by Argentina’s government to remove the court-appointed mediator in the dispute with creditors that triggered a default by the country last week.

U.S. District Judge Thomas P. Griesa dismissed Argentine complaints that mediator Daniel Pollack has not been an impartial mediator in their battle with investors who refused to accept a debt restructuring after the last time the country defaulted, in 2001.

Referring to Pollock by his legal title of special master, Griesa praised his work in handling the dispute, saying he has acted with “great skill” and been even-handed with all parties.

“It is hard to imagine a worse move that the court could make than to remove the special master,” Griesa said. “It would be a gross injustice and would drastically interfere with the process which has been going on and must continue.”

Jonathan Blackman, an attorney for Argentina, criticized Pollack and ... Read More

Argentine Leader Defies Wall Street for Main Street

| August 1st, 2014 | No Comments »
Wall Street Journal WSJ-01


BUENOS AIRES—Argentines awoke Thursday to find their country was once again a financial pariah after President Cristina Kirchner, a populist known for picking political fights, stared down Wall Street hedge funds and pushed her country into its second default in 13 years.

Her refusal to settle with bondholders owed $1.6 billion could prove politically expedient in the short term: It distracts from Argentina’s slowly crumbling economy and shores up her support among many working-class Argentines who form the base of her Peronist movement, economists and analysts say.

But like many of Mrs. Kirchner’s combative moves since she became president in 2007, this one is fraught with risk, potentially deepening an economic recession, weakening a fragile peso and adding to a rate of inflation that at more than 40% is among the world’s highest.

“From the point of view of the real economy, I don’t see any benefits,” said Martin Redrado, ... Read More

Argentina in denial over debt dispute

| August 1st, 2014 | No Comments »

By Robert Plummer

Right from the start, the Argentine government’s attitude to its debt dispute with US hedge funds made it all but inevitable that the country would fail to reach a compromise.

“We’re not going to default, they’ll have to invent a new term to define what’s happening,” said President Cristina Fernandez de Kirchner last week, deep in denial, as the deadline loomed for the country to meet its obligation to the so-called “vulture funds”.

Thanks to a US court decision, Argentina is required to pay $1.3bn (£766m) to investors who bought its bonds at a big discount after its economic meltdown and previous default in 2001-02.

It failed to do so by 30 June and a 30-day grace period has now expired.

But the government resisted that course of action, because it feared that it could lead to the unravelling of other debt deals that it struck with ... Read More

Argentina slides into default as debt talks fail

| July 31st, 2014 | No Comments »
Article originally appeared in the Associated Press


NEW YORK (AP) — The collapse of talks with U.S. creditors sent Argentina into its second debt default in 13 years and raised questions about what comes next for financial markets and the South American nation’s staggering economy.

A midnight Wednesday deadline to reach a deal with holdout bondholders came and went with Argentine Economy Minister Axel Kicillof holding firm to his government’s position that it could not accept a deal with U.S. hedge fund creditors it dismisses as “vultures.” Kicillof said the funds refused a compromise offer in talks that ended several hours earlier, although he gave no details of that proposal.

“We’re not going to sign an agreement that jeopardizes the future of all Argentines,” Kicillof said after he emerged from the meeting with creditors and a mediator in New York City. “Argentines can remain calm because tomorrow will just be another day ... Read More

Argentina hours away from bond default

| July 30th, 2014 | No Comments »

By Katy Watson

Argentina’s economy minister is expected to return to the negotiating table on Wednesday in a last-ditch attempt to prevent the country defaulting on its bonds.

Axel Kicillof’s talks with “hold-out” investors ended late on Tuesday night in New York without agreement.

They are demanding a full pay-out of $1.3bn (£766m) on the bonds they hold.

A US judge has ruled that the “hold-outs” must be paid by Wednesday night if no deal is agreed.

But thousands of miles away in Buenos Aires, many are sceptical that there can be any agreement.

The government’s rhetoric has been clear.

The “hold-outs” are US hedge funds that bought debt on the cheap during Argentina’s darkest hours and never agreed to restructuring.

President Cristina Fernandez de Kirchner calls them vultures, accusing them of taking advantage of Argentina’s debt problems to make a big profit.

What makes the problem worse is that if the “hold-outs” get their ... Read More

Argentina in last-ditch effort to avert default

| July 29th, 2014 | No Comments »
Yahoo News-01


BUENOS AIRES, Argentina (AP) — Argentina’s government said Monday it will make another effort to reach a deal with US. creditors ahead of a looming deadline that risks sending the country into its second default in 13 years.

Cabinet Chief Jorge Capitanich said an Argentine delegation would be in New York to meet with a court-appointed mediator Tuesday, just a day ahead of the deadline.

“Argentina’s position is to reach a dialogue that establishes fair, legal and sustainable conditions for negotiation with 100 percent of the bondholders,” Capitanich said at a news conference at the presidential palace.

But the mediator, Daniel A. Pollack, said in a statement that while the Argentines would meet him, they had not yet accepted his recommendation of face-to-face talks with the plaintiffs in the dispute, led by New York billionaire Paul Singer’s NML Capital Ltd.

... Read More

IMF sees ‘substantial costs’ of an Argentina default

| July 25th, 2014 | No Comments »
From AFP

The IMF’s chief economist warned Thursday that a default by Argentina in its battle with holders of its defaulted debt may hurt its economy and the global financial system.

“If it goes into default and doesn’t pay the holdouts, there might be substantial costs, being basically unable to access markets for some time,” said Olivier Blanchard, head of the International Monetary Fund’s team of economists.

Blanchard, speaking at a news conference on the latest IMF growth forecasts for the global economy, also emphasized that “there’s a cost to the world in the sense that we need resolution systems which work well when countries are in trouble.”

Under a US court order, Argentina has until next Wednesday to either pay certain hedge funds demanding full payment on defaulted bonds or risk being declared in default.

Blanchard said the Argentina case means “there’s much more uncertainty as to how we’ll be able to restructure ... Read More

Argentina: se aplaza reunión entre gobierno y “fondos buitre”

| July 23rd, 2014 | No Comments »

La reunión programada para este miércoles entre el gobierno de Argentina y los representantes de los llamados “fondos buitres” ha sido aplazada.

Ambas partes debían encontrarse en EE.UU., en la oficina del mediador judicial Daniel Pollack.

No obstante, el abogado hizo saber este miércoles que la reunión no podría realizarse y que tendría que ser aplazada “debido a que los argentinos dijeron que no podrían llegar a tiempo” a Nueva York.

El Ejecutivo argentino litiga contra un grupo de inversionistas que reclaman una suma millonaria por los títulos de deuda soberana impagados cuando el país cesó pagos por unos US$100.000 millones.

Más del 90% de los tenedores de bonos se han acogido a las quitas ofrecidas por el gobierno, pero los fondos con los que ahora litiga el gobierno no han aceptado rebajas.

De hecho, el gobierno los califica de “fondos buitre” porque considera que pagaron precios muy rebajados por sus títulos en lo peor de ... Read More

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