Fact Check: Argentina

937 days, 15 hours, 30 minutes ago


Receive email alerts


Today, ATFA released a short web film, entitled, ARGENTINA:  STILL REFUSING TO NEGOTIATE.”  Featuring accredited news broadcasts and print coverage, and relying upon legal documents and contracts, academic studies, and economic analysis, ATFA’s film captures in 11 minutes the story of Argentina’s debt debacle.

The release of ATFA’s new film comes days after Argentine Economy Ministry (MECON) criticized the court-appointed mediator, Daniel Pollack for requesting that Argentina meet with its creditors, without preconditions, to negotiate a settlement.  To this entreaty, Economy Minister Axel Kicllof, who has previously stated that he would prefer a default to negotiation with creditors,  claimed that Judge Griesa is “blocking any negotiation” and resumed his harsh criticism of Judge Griesa’s court and the U.S. justice system. Those criticisms began last summer, after Argentina exhausted all of its efforts to use that same system of justice to advance its own goals.

It’s understandable that the Court would expect Argentina to finally come to the table.  After all, the so-called RUFO clause, the excuse that Argentina’s leaders had given for not negotiating all of last year, expired on December 31st.  ATFA never believed that RUFO was a legitimate reason not to negotiate, and we reported last summer that RUFO was nothing more than a smokescreen and ruse.

Given the message emanating from the MECON last week, ATFA’s release of ARGENTINA: STILL REFUSING TO NEGOTIATE is well-timed, and will provide our readers with a review of the facts relating to the decision of Argentina’s leaders to default. Those facts include:

 –  Argentina voluntarily agreed to be bound by New York law and waived its sovereign immunity when it issued its bonds.

 –  In 2012, Argentina lost a dispute in the New York court of Judge Griesa, which granted bondholders’ their contractual pari passu rights. Argentina then availed itself of the U.S. legal system to appeal the ruling.  The Second Circuit Court of Appeals, in upholding Judge Griesa’s ruling, called Argentina a “uniquely recalcitrant debtor”.

 –  In its appeal to the U.S. Supreme Court, Argentina promised that it would comply with Judge Griesa’s ruling if the Supreme Court did not hear its case.  In June 2014, the Supreme Court rejected Argentina’s appeal.

 –  Following its final court loss, Argentina chose to default instead of simply sitting down to negotiate with creditors.

 –  Argentina then broke its promise to the U.S. Supreme Court to obey the ruling, and it put in motion a scheme to evade Judge Griesa’s orders, which led a contempt of court citation in September 2014.

 –  As ATFA predicted, Argentina’s choice to default is having a dramatic impact on the Argentine economy and on the Argentine people.

 –  Argentina’s creditors are still waiting to negotiate.  MECON attempts to mislead its own citizens when it states otherwise, or claims that creditors are demanding immediate payment in full. 

 –   Sadly, Argentina refuses to negotiate.  Instead of negotiating, its leaders engage in rash attacks on the Judge, the court-appointed mediator, creditors, and even the United States government.  It fabricates new, nonsensical excuses to mask its defiant refusal to reach a resolution. All of this appears to be nothing more than an attempt to distract from the country’s self-imposed economic calamity.

As ATFA’s new film points out, it is no accident, or “conspiracy,” that Argentina continues to be isolated from the world’s capital markets, or that inflation continues to rise right along with Argentine unemployment, or that the Republic just one place removed from the “top spot” on the World’s Misery Index.

The decision to default has exacerbated the slow-motion train wreck arising from extreme mismanagement of the Argentina’s economy

RUFO expired more than 50 days ago.  Why won’t Argentina negotiate?