Argentina blames US, denies default claims

BUENOS AIRES - Agence France-Presse

Argentina’s President Cristina Fernandez de Kirchner and Economy Minister Axel Kicillof (R) look on during a ceremony at the Presidential Palace.

Argentina blames the United States for the legal battle that forced it to miss a debt payment and, despite ratings agencies’ declarations to the contrary, denied being in default.

Ratings agency Fitch declared Argentina in “restrictive default” July 31 after 11th-hour talks failed to resolve the country’s dispute with two U.S. hedge funds that refuse to accept a write-down on their Argentine bonds.

Fitch’s label echoed the “selective default” declared Wednesday by Standard & Poor’s. Both terms indicate that Argentina has defaulted on one or more of its financial commitments but continues to meet others.

U.S. District Judge Thomas Griesa has blocked Argentina from paying its “exchange creditors” – those who agreed to take a 70-percent write-down after the country’s 2001 default – without also paying two American hedge funds that took it to court demanding full payment.

Griesa has called a hearing in the case between Argentina and the hedge funds on Friday in New York, but it was not clear what the court can now achieve in a dispute that has dragged on for years.         
President Cristina Kirchner’s cabinet chief, Jorge Capitanich, blamed the U.S. government, Griesa and a court-appointed mediator for the messy legal dispute, which made Argentina miss a $539 million payment to exchange bondholders.

“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 said.

He accused Griesa and mediator Dan Pollack of “incompetence” and said Argentina would take the matter to international courts.

The U.S. State Department said it opposed the court ruling but called on Argentina to get its books in order.

“They’ve made some good progress towards meeting their obligations, and we believe it’s in their interest to normalize relations with all of its creditors,” said deputy State Department spokeswoman Marie Harf.

Kirchner denied her country was in default, reiterating that it had transferred the payment in question and condemning the tactics of the hedge funds, which she calls “vulture funds.”        

“We live in a profoundly unjust and profoundly violent world and this is also violence. Like missiles in war, financial missiles also kill,” the president said in a nationally televised address. “I want all Argentines to remain very calm, because Argentina is going to use all the legal instruments our contracts give us.”