Argentina blames US for debt default

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Jorge Capitanich1 Reuters. Argentine President Cristina Kirchner's cabinet chief Jorge Capitanich.

Buenos Aires - Argentina blamed the United States on Thursday for the legal battle that blocked the country from servicing its restructured debt and forced it into a new default.

Eleventh-hour talks with two American hedge funds that have refused to accept a write-down on their Argentine bonds failed Wednesday, causing Buenos Aires to miss a payment deadline on its restructured debt under a US court decision that bars it from servicing those bonds without also paying the so-called “holdouts.”

Argentine President Cristina Kirchner's cabinet chief, Jorge Capitanich, accused US District Judge Thomas Griesa and court-appointed mediator Dan Pollack of “incompetence” and said Argentina would take the matter to international courts “to exercise its rights before the international community.”

“If there's a judge who's an agent of these speculative funds, if the mediator is their agent, what is this justice you're talking about? There's a responsibility of the state here, of the United States, to create the conditions for the unconditional respect of other countries' sovereignty,” he told a press conference in Buenos Aires.

Ratings agency Standard & Poor's had already placed Argentina in “selective default” before the unsuccessful end of Wednesday's talks at the offices of Pollack, the New York lawyer appointed by US District Judge Thomas Griesa to break the impasse between Argentina and hedge funds NML Capital and Aurelius Capital Management.

Capitanich accused the judge of “mala praxis,” or malpractice, and condemned the US government for failing to intervene.

“There's been mala praxis here by the United States justice system, for which all three branches of the government are responsible,” he said.

“Because of this mala praxis the United States is responsible for failing to act adequately. And don't come to us with the excuse that the justice system is independent, just because it's 'independent' of reason and not of the vulture funds,” he added.

“There's been a lot of effort (by Argentina) to promote the right conditions for negotiation, and the unyielding position of some miniscule groups has left serious doubts over the precariousness of the US justice system and the responsibility of the US government, which didn't intervene to enforce the laws and contracts that they themselves regulate.”

Argentina was due to make a $539 million (R5.8 million) payment Wednesday on debt it had restructured after its catastrophic 2001 default, but Griesa blocked it from doing so without also paying the holdouts the $1.3 billion it owes them. - Sapa-AFP


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