MercoPress. South Atlantic News Agency

Strong speech from Cristina Fernandez expected at Mercosur summit in Caracas

The Mercosur summit takes place on Tuesday and as of Wednesday Argentina might be declared in technical default

Argentine President Cristina Fernandez will attend this Tuesday the leaders' summit of Mercosur in Caracas, Venezuela. The president will travel to Caracas in order to participate in a congress originally scheduled for December 17, but which suffered several postponements.

 The first delay was caused by health problems which afflicted the Argentine president who underwent surgery to drain an hematoma in her head at the end of 2013, while ongoing conflicts in Venezuela between government supporters and opposition members further pushed back the summit.

Cristina Fernández therefore will take her place at the meeting just one day before the deadline for a deal with holdout investors expires, with Argentina at risk of falling into default if holders of restructured bonds are not paid by next Wednesday.

The Argentine president is expected to make an impassionate speech on the so called 'vulture funds' that openly conspire against sovereign debt restructuring endangering the process and the whole global financial system.

According to the host Nicolás Maduro the heads of state from Brazil, Dilma Rousseff, Uruguay, Jose Mujica, Paraguay, Horacio Cartes have confirmed attendance, All of them are full Mercosur members.

Evo Morales, president of Bolivia, will also be present at the summit in an observer capacity. Bolivia is in the process of joining Mercosur, although the country needs the approval of Paraguay in order to confirm their presence in the group.

Invitations were also extended to Chile's Michelle Bachelet, El Salvador leader Salvador Sánchez Cerén and Nicaragua's Daniel Ortega to witness the meeting in Caracas, although their attendance is still unconfirmed.

Argentina Vice-president Amado Boudou although indicted on corruption charges, will receive control of the Executive while head of state Cristina Fernandez is out of the country.

Regarding the ongoing litigation with holdouts, Argentina does not have a meeting scheduled for tomorrow Monday with court-appointed mediator Daniel Pollack in the US in its debt dispute with holdout creditors “but talks continue”, according to a government source quoted by the Buenos Aires media.

“There is no meeting scheduled for Monday. Talks are continuing,” the government source said.

Argentina's delegation headed home to seek instruction from the government after it failed to reach a breakthrough on Friday with the US court-appointed mediator Daniel Pollack, in talks that lasted just an hour.

Last week, US District Judge Thomas Griesa ordered Argentina and holdout creditors who have rejected its debt restructurings to meet 'continuously, round the clock' with Pollack to try to reach a deal and avoid Argentina's second default in 12 years.

Following legal setbacks for Argentina in US courts, the Argentine government is running out of time to comply with a 2012 ruling by Griesa to pay 1.33 billion plus accrued interest to the holdouts from speculative funds or 'vulture funds'.