Skip to: Content
Skip to: Site Navigation
Skip to: Search


New York judge's ruling sparks nationalist surge in Argentina

Stakes are high for Argentina's President Kirchner in a legal tug-of-war over full repayment of bonds from the country's 2002 default. Kirchner says her country is the victim of 'judicial colonialism.'

By Emily SchmallContributor / December 10, 2012



Buenos Aires, Argentina

The stakes couldn’t be higher for Argentine President Cristina Fernández de Kirchner as a legal tug-of-war with a $20 billion US hedge fund plays out in a New York case that has sent nationalist sentiment soaring in Argentina and raised concerns about the impact on future efforts to help debt-ridden countries recover.

Skip to next paragraph

NML Capital, part of American billionaire Paul Singer’s Elliott Management, is among a handful of creditors demanding full repayment of bonds that Argentina defaulted on in 2002, rather than the partial repayment to which most creditors agreed. They were buoyed by the Nov. 21 ruling of United States District Judge Thomas Griesa, who, arguing that Argentina must treat all its creditors equally, said the Southern Cone country must pay $1.33 billion to NML – as well as satisfy the demands of other creditors – by Dec. 15, or potentially face a second, “technical” default. 

A US court of appeals, however, issued a stay on Griesa’s order, sending it back to let the court figure out the mechanics by which it would force Argentina, a sovereign nation, to submit to local courts.

Legal experts are watching the NML case closely because of implications they say it could have elsewhere in a scantly regulated area of international finance. President Kirchner, whose approval ratings arein a slump as the commodities-heavy economy slows, has seized the moment to shore up national sentiment among a population that remains wary of foreign creditors after Argentina’s $100-billion sovereign debt crash, the largest in history. Kirchner has used the conflict to cast Argentina as the victim of predatory “vulture funds” seeking to impose “judicial colonialism.”

“One judge wants to frustrate Argentina’s greatest achievement,” Kirchner told crowds in Buenos Aires’s Plaza de Mayo Sunday, during an event to commemorate Argentina’s return to democracy in 1983. The crowd responded with hisses and boos.

In recent months, the government’s inability to settle with a handful of holdouts led by NML has resulted in one of its Navy tall ships being impounded in Ghana and an expensive court case in New York.

Permissions

  • Weekly review of global news and ideas
  • Balanced, insightful and trustworthy
  • Subscribe in print or digital

Special Offer

 

Doing Good

 

What happens when ordinary people decide to pay it forward? Extraordinary change...

Endeavor Global, cofounded by Linda Rottenberg (here at the nonprofit’s headquarters in New York), helps entrepreneurs in emerging markets.

Linda Rottenberg helps people pursue dreams – and create thousands of jobs

She's chief executive of Endeavor Global, a nonprofit group that gives a leg up to budding entrepreneurs.

 
 
Become a fan! Follow us! Google+ YouTube See our feeds!