Lobbyists for a group of ‘hold-out’ investors are in London to persuade the British Government to take punitive action against Argentina to help their claims against the country.
Among the members of the American Task Force Argentina are vulture funds who bought Argentine debt once the country had already gone into crisis in order to gain huge profits in the early 2000s. The group is trying to persuade the UK government to follow the lead of the US and vote against new World Bank loans for Argentina.
Nick Dearden, Director of Jubilee Debt Campaign said:
“The British Government must not decide its foreign policy on the basis of a small group of vulture investors. Argentina defaulted on this debt more than 10 years ago because of economic crisis and soaring poverty levels in the country. It is quite right that the Argentine government, after months of protest, put the rights of its people ahead of the desire of investors to receive their full payout.
“Unlike other creditors, these investors refused to take part in Argentina’s debt restructuring, wanting to be paid in full on the reckless loans. Indeed, some did not even lend Argentina money, but instead bought Argentina’s debt for a fraction of its real value after the crisis had already begun, banking on the fact that they would be able to profiteer from the crisis. These funds got what they deserved.”
Jubilee Debt Campaign’s Director is available for interview. For more information call JDC on 0207 324 4724 or 07932 335 464.
1. Jubilee Debt Campaign UK is part of a global movement demanding freedom from the slavery of unjust debts and a new financial system that puts people first.
2. Argentina defaulted on its debt at the end of 2001. It’s economy was in turmoil after following a set of policies laid down by the International Monetary Fund. Despite three years of recession, the economy kept contracting. Over half the population – 20 million people – was living below the poverty line. Default was undoubtedly the right thing to do. After several years of stagnation Argentina’s economy started growing within a few months. Argentina became the fastest growing economy in the Americas. Eleven million people were pulled out of poverty and unemployment more than halved in the successive 5 years.
3. After default, Argentina offered it’s bondholders a deal – new bonds of lower value in exchange for the old bonds they held. In effect a steep discount on the amount owed. Many took the offer, but the American Task Force Argentina represents those that didn’t. One of these companies – called NML – recently took court action against Argentina in London. NML is a subsidiary of Elliott Associates, a US hedge fund that pioneered ‘vulture fund’ activity by winning a case against Peru in the 1990s, getting back 400% what they paid for Peru’s debt. NML, based in the Cayman Islands, has been harassing Argentina through foreign courts for years.