Argentine Cabinet Chief Jorge Capitanich -Photo from Archives
“Argentina has met all of its commitments as scheduled,” -Argentine Foreign Minister Hector Timerman
Source: shanghaidaily.com
BUENOS AIRES, Sept. 16 (Xinhua) — Argentine Foreign Minister Hector Timerman on Tuesday summoned the top U.S. diplomat in the South American nation to rebuke him for using the word “default” to describe Argentina’s failure to pay off its foreign debt.
Kevin Sullivan, the U.S. charge d’s affaires and the top ranking diplomat at the U.S. Embassy in Buenos Aires, was called to the office of Foreign Minister Hector Timerman. The Argentine official expressed his government’s “profound unease” at assertions Sullivan had made about the country’s defaulting on debt during an interview with local media and called the statements “inappropriate.”
Timerman told Sullivan that “Argentina has met all of its commitments as scheduled,” referring to Argentina’s debt service payments to creditors.
Part of Argentina’s debt payments, deposited in a U.S. bank, have been frozen at the ruling given by a federal judge in New York due to an ongoing financial dispute between a minority group of Argentine debt bond holders in the United States and the Argentine government.
In an interview carried by Argentina’s Clarin daily Monday, Sullivan reportedly had said: “it is important for Argentina to come out of default as soon as possible to be able to resume the path of sustainable economic growth and attract the investment it needs.”
During his daily press briefing Tuesday, Argentine Cabinet Chief Jorge Capitanich also spoke of the incident, calling Sullivan’s remarks “incorrect, unfortunate and representing undue interference in the sovereignty of a country.”
“Argentina is paying and meeting its obligations,” said Capitanich. “The impediment to some creditors receiving their payments is not because of Argentina, it’s because of a judge who is blocking the payment process. Argentina has deposited the funds … so Argentina has paid.”
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Argentina Says U.N. Vote Vindicates Its Debt Fight Against ‘vultures’
By Walter Bianchi and Richard Lough
[…]
Cabinet Chief Jorge Capitanich’s comments came on the same day the lower house of Congress held a marathon debate over a draft law proposing to remodel the country’s debt to enable it to skirt U.S. court rulings in support of the hedge funds.
The lower house is expected to vote in favor of the bill in the early hours of Thursday. But the law may not achieve much if legal hurdles and investor skepticism prevent the proposed restructuring measures from being implemented.
President Cristina Fernandez says her country is the victim of “vulture funds” that are prepared to wreck its finances in their pursuit of huge profits. She wants a global framework that would prevent a minority of investors from scuppering debt restructuring agreements.
Prompted by Argentina and its ally Bolivia, the U.N. General Assembly voted overwhelmingly in favor of such a convention.
“If 124 countries in the United Nations support the Republic of Argentina, it means that Argentina is right in its claims,” Capitanich told reporters in Buenos Aires.
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Argentina Warns of Severe Measures for U.S. Envoy’s Default Talk
Source:
http://www.bloomberg.com/news/2014-09-16/argentina-warns-of-severe-measures-for-u-s-envoy-s-default-talk.html
By Charlie Devereux Sep 16, 2014
Argentina warned the U.S.’s top diplomat in the country today he would suffer “severe measures” if he continues to describe a blocked bond interest payment as a default.
Comments by Charge D’Affaires Kevin Sullivan that Argentina should cure the default it entered July 30 as soon as possible were “improper” since Argentina’s inability to pay bondholders stems from a “perverse” ruling by a U.S. judge, the Foreign Ministry said today in an e-mailed statement. Foreign Minister Hector Timerman today summoned Sullivan for a meeting today following comments he made in an interview in the Buenos Aires-based newspaper Clarin yesterday.
Timerman told Sullivan “that if these kind of interferences in the internal affairs of Argentina continue, the most severe measures stipulated by the Vienna Convention regarding the behavior of diplomatic representatives will be adopted,” according to the statement.
The Vienna Convention on diplomatic relations doesn’t state what its most severe measure is regarding the behavior of diplomats, though it does stipulate that they can be expelled. Sullivan has acted as stand-in ambassador in Argentina since 2013, when Ambassador Vilma Martinez left the post. She has yet to be replaced.
Interest Payment
While Standard & Poor’s and the International Swaps & Derivatives Association ruled that Argentina’s failure to pay a $539 million interest payment on restructured bonds is a failure-to-pay credit event, President Cristina Fernandez de Kirchner said the country isn’t in default since it made every effort to pay.
U.S. District Court Judge Thomas Griesa blocked the payment due June 30 after Argentina refused to comply with an order to pay holders of debt from the 2001 default in full at the same time it pays bondholders that accepted restructurings in 2005 and 2010.
The government, which says that paying the litigants an estimated $1.6 billion would trigger claims for a further $120 billion, last week passed a law to allow it to pay foreign creditors locally in an attempt to circumvent the ruling.
Sullivan said in an interview in Clarin yesterday that the U.S. wouldn’t back a resolution in the United Nations to regulate sovereign debt restructurings and said it’s important for Argentina to cure the default as soon as possible in order to return to economic growth.
The U.S. Embassy doesn’t comment on the contents of private meetings, spokeswoman Ana Duque-Higgins said.
To contact the reporter on this story: Charlie Devereux in Buenos Aires at cdevereux3@bloomberg.net
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