Post date : 04.08.2015 4:29 pm
Economy Minister Axel Kicillof gave a speech this morning to further harass Citibank merely because the bank reached an accord with holders of Argentina’s defaulted debts. Three weeks ago a New York court confirmed that Argentina is enjoined from making payments on certain internationally traded Argentine law U.S. dollar bonds unless the Republic fulfilled its contractual obligations to make payment to certain bondholders who have not been paid since the Republic’s 2001 default. The court told Citibank that if Argentina violated the order by making a payment on March 31, then Citi could not pass along the illegal payment. When Citi said that it would comply with the U.S. court, Kicillof initiated an extensive intimidation campaign against Citi. To avoid further harassment, Citi negotiated a resolution with the bondholders which allowed Citi to process a payment – should Argentina violate the order on March 31 – while Citi exited its custody business in Argentina.
Kicillof must have been quite embarrassed that Citi was able to reach an agreement with Argentina’s creditors because the Minister has wasted so much energy in the past year attempting to falsely paint creditors as intransigent. Here’s the facts: Argentina’s creditors have made clear they would like to negotiate a mutually beneficial resolution with Argentina. The immediate and long-term economic benefits of resolving this dispute are well-documented. But Kicillof refuses to even sit down. Instead, Kicillof would rather have more litigation (now he wants to sue Citi!) and give speeches demonizing creditors and anyone who decides to negotiate with creditors. If Kicillof is upset with Citi, it’s because they destroyed his false narrative about creditors.
Attacking holders of Argentina’s 2001 defaulted bonds (of which there are several thousand) and Citibank is also an attempt by Kicillof to distract the Argentine public from his poor record as Economy Minister. Instead of taking the necessary measures to clean up Argentina’s 2001 and 2014 defaults, curb spiraling inflation, lower the cost of credit to local businesses, attract investment into the country, manage the erosion of foreign exchange and bring greater prosperity to all Argentine people, Kicillof gives lectures and bullies law-abiding local companies.
By making baseless accusations against creditors and Argentine companies, Kicillof shows the world that Argentina is not a friendly place for investment or business. This only harms the Argentine economy and hampers the prosperity of its people. Kicillof can continue to rant about creditors, but that does nothing to end the dispute with creditors.
ATFA urges Argentina to engage in dialogue to end the 2001 default.