Argentina’s debt affair: far beyond vulture funds
In December 2001 Argentina shocked the world when it declared the largest external debt default in history following its catastrophic economic and political crisis. After a decade of debt negotiations, President Fernandez de Kirchner’s government recently boasted of having converted the country into a “serial payer” highlighting its “dis-indebtedness” policy. Yet when the US Supreme Court upheld a successful lawsuit by US “vulture funds” in June 2014, approval of their exorbitant bond repayment demands sent shockwaves through the global financial system and condemned Argentina to a new, „selective‟ debt default. This paper analyzes the origins and chronology of Argentina’s debt. It proposes that the absence of a comprehensive audit of its legitimacy explains why the country has remained trapped in a cycle of debt-dependency since the 1980s. Further, it provides critical lessons for those countries that face the potential impossibility of debt restructurings as a consequence of the case.
Francisco J Cantamutto, FLACSO México/ ONACYT,firstname.lastname@example.org
Daniel Ozarow, Middlesex University Business School, D.Ozarow@mdx.ac.uk