The bust-up between Argentina and its holdout creditors is getting uglier by the day. As the “vulture funds” do their best to prove that there is corruption at the highest levels of government, President Cristina Fernandez responded yesterday by accusing them of engaging in terrorism.
The increasingly dirty fight comes as the holdouts disdainfully reject the possibility that a deal with the private sector might materialise, so rescuing Argentina from its default situation. Aurelius Capital Management said on Wednesday that none of the offers presented by a group of Wall Street banks were even “remotely acceptable.” Continue reading »
It may be difficult to argue convincingly that a default could be anything but bad for Argentina’s economy – the real question is just how bad – but it is less clear what it means for politics.
You might think that little could be of greater importance for leaders of a country in very serious danger of falling into default in a matter of hours than to be doing their utmost to prevent this from happening. Continue reading »
Who will jump first in Argentina’s game of chicken with its holdout creditors as they race towards the abyss of sovereign debt default? Or will both drive off the edge?
Although just a few days remain until Argentina’s July 30 deadline to make bond interest payments – a failure to do so would result in default – it is still possible that one of the two parties will make a last-minute concession that would allow a deal to be made. Indeed, if a compromise is made, it is most likely to come at the eleventh hour. Continue reading »
As Argentina comes to terms with its 1-0 defeat by Germany, it is already half time in a critical showdown with so-called “holdout” creditors.
Two weeks have elapsed since Argentina entered a month-long grace period after failing to make interest payments to bondholders on June 30, and two weeks remain until it will default for a second time in a dozen years if those payments have still not been made by July 30. Yet talks with the holdouts appear to have made precious little progress so far. Continue reading »
When is bad news in fact good news? Take the case of Argentina, where it is being argued, somewhat counter-intuitively, that the recession looming on the horizon could be the economic cure that the government needs.
Certainly, what has most been bothering the government on the economic front has been the alarming rate of decline of foreign exchange reserves over the past two years. But after a devaluation in January managed to stabilise reserves at around $28bn, they have risen slightly in April. Continue reading »
When the Pope met Queen Elizabeth on Thursday, there was one thing – doubtless to Argentine President Cristina Fernández’s great dismay – which was not on the agenda: the Falkland Islands (or, as the Argentine Pope might have called them, Las Malvinas).
As if to make up for that omission, Fernández ensured the disputed territory’s continued presence in Argentines’ minds by printing a map of the archipelago on a new 50 peso note (worth just over $6), with a stirring image of a gaucho who rose up against British rule in 1833 on the other side. Continue reading »
Confused about what’s going on in Argentina? If so, don’t fret – you’re not the only one.
In the space of a day, Argentine debt was upgraded by Bank of America and downgraded by Moody’s. More baffling still, they cited much the same reasons – the level of reserves at the central bank. Continue reading »
What a headache debts can cause. No one knows this better than Cristina Fernández, who after receiving mixed messages related to Argentina’s debt in recent days will have plenty to chew over on her transatlantic flight before she meets the Pope on Monday.
There was good news today when the Paris Club, a group of countries which Argentina owes about $10bn, invited their debtor to begin formal negotiations in May, after economy minister Axel Kicillof presented a repayment plan in January. Resolution of the Paris Club problem is not only a prerequisite for Argentina’s return to the international capital markets, but it could also help to get much-needed foreign investment flowing back into the country. Continue reading »
Miguel Galuccio has three principal objectives for 2014: “to produce, produce and produce.”
To help achieve that aim, Galuccio, who has run the Argentine energy company YPF since the government expropriated a 51 per cent share from Spain’s Repsol in 2012, is looking for partners. Continue reading »
With little more than a week left of his presidency, Sebastián Piñera is fighting on to the last.
On the anniversary of one of the most powerful earthquakes on record wreaking havoc in Chile just days before he came to power four years ago, Piñera trumpeted his government’s record in cleaning up the mess yesterday.
However much opponents may accuse him of massaging the numbers, with 97 per cent of the infrastructure destroyed now rebuilt according to official figures, it seems fair to say that Piñera did a decent job in keeping his promise to fix the problems by the end of his term. Continue reading »
Is it the beginning of the end for what enthusiasts like to call “the trial of the century” in the world of sovereign debt restructuring?
Well, perhaps, but there could still be an painfully slow ending to a trial that has dragged on for the best part of a decade, after Argentina filed a petition on Tuesday – right on deadline – seeking a US Supreme Court review of an order to pay $1.33bn to “holdout” bondholders who refused to accept restructured debt after Argentina’s 2001 debt default.
There are now three possible scenarios as to how things could go for Argentina at the Supreme Court. Continue reading »
It had all been going so well for Uruguay’s president, José “Pepe” Mujica. The passing of a groundbreaking law this month that will legalise and regulate the production and consumption of marijuana has earned him praise around the world.
This even helped Uruguay earn its status as The Economist’s first ever ‘country of the year’. So the resignation on Saturday of Mujica’s finance minister, Fernando Lorenzo, was a bit of a dampener as the year comes to an end. He will be replaced by the president of the central bank, Mario Bergara it was announced on Monday. Continue reading »
It’s hot in Buenos Aires. So hot, that there has been a wave of blackouts this week as melting porteños, as residents of Argentina’s capital are known, jam the electric grid by cranking their air-conditioners up to full blast.
This has become an annual occurrence during heat waves in the southern summer, as continuous underinvestment in the electricity system – since utility rates were frozen over a decade ago – takes its toll. But tempers as well as temperatures have been rising – both on the streets where sporadic protests are disrupting daily life, and in the government, which has decided that the fault lies with the private companies providing the electricity, Edesur and Edenor. Continue reading »
In almost the only Argentine province not to be affected in recent days by damaging police strikes, which triggered a wave of opportunistic looting, a very different headache has emerged for President Cristina Fernández de Kirchner.
A series of articles published in the respected broadsheet La Nación this week which suggest that the president and her late husband, Néstor Kirchner, are linked to a series of murky property deals in Santa Cruz province have breathed new life into corruption allegations that Fernández would doubtless rather avoid. Continue reading »
Pot smokers all over the world may be lighting up joints to celebrate the fact that Uruguay on Tuesday became the first country in the world to legalise cannabis completely – from planting the seed to getting high.
But is what President José “Pepe” Mujica openly admits is an experiment going to work? Will Uruguay succeed in reversing rising crime rates, which were the initial impetus and justification for the new law? Continue reading »