Finance Minister Alfonso Prat-Gay held a press conference this afternoon to announce that the country’s debt has risen from US$2.943 billion in 2001 to US$9.882 today due to interest accrued as a result of the former Kirchner’s administration’s refusal to pay so-called vulture funds as well as additional “me too” creditor debts over the last decade.
“That’s the price of washing your hands of [the debt] for 10 years,” Prat-Gay said. “This isn’t our mess but we have no problem cleaning it up.”
“Our problem with the holdouts isn’t something we can solve in 15 years or in 48 hours, but we’re sticking to the same line: we want to solve this issue as soon as possible,” he added.
President Mauricio Macri’s administration’s willingness to reach an agreement with the vulture funds represents a 180 turn from former President Cristina Fernández de Kirchner’s staunch opposition to negotiating with the holdouts.
An Argentine delegation is currently meeting with mediator Daniel Pollack in New York to reach an agreement with the holdout creditors.
Argentina’s dispute with vultures dates back to 2001 when the country defaulted on US$100 billion in international debt. A group of creditors led by NML Capital purchased some of the defaulted bonds and refused to accept a debt restructuring plan that would have exchanged the original bonds for bonds worth 30 cents on the dollar. According to a New York Court ruling by Judge Thomas Griesa, Argentina must pay NML and the other creditors in league with it at full value and until it does so, it cannot pay other creditors who have agreed to be paid at the restructured rate. Under the Kirchner administration, Argentina refused to pay up and is officially considered to be in contempt of court.
For a look back on this past year’s dealings with vulture funds, check out this article by The Bubble.