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Montevideo, November 14th 2018 - 15:30 UTC

Legal framework to restructure sovereign debts receives strong UN boost

Wednesday, December 31st 2014 - 02:33 UTC
Full article 44 comments
Argentina's U.N. Ambassador Ms Perceval said the resolution will help “other developing and developed countries that suffer and continue to suffer.” Argentina's U.N. Ambassador Ms Perceval said the resolution will help “other developing and developed countries that suffer and continue to suffer.”
However most leading developed nations voted against the resolution since the issue is already been dealt by other institutions including the IMF However most leading developed nations voted against the resolution since the issue is already been dealt by other institutions including the IMF

The U.N. General Assembly approved this week the financing of a plan to develop a new legal framework to restructure national debts, a move aimed at avoiding the kind of speculative action that led Argentina to a second default.

 The 193-member world body voted 119-15 with 35 abstentions in favor of a resolution outlining the plan, which was proposed by developing countries and strongly supported by Argentina. The United States, Britain, Japan, Switzerland and Canada were among those voting “no.” The vote received extensive coverage in the US main newspapers such at The New York Times and the Washington Post.

Under the plan, the General Assembly beginning February will establish a committee open to participation by all member states to negotiate a legal framework during the current session, which ends next September. It invites other U.N. bodies, financial institutions like the World Bank and International Monetary Fund, the private sector, academia and others to contribute to the committee's work.

The resolution adopted Monday will implement a resolution also approved overwhelmingly on Sept. 9 calling for the General Assembly to adopt a new legal framework on debt restructuring.

Argentina has been involved in a long legal battle with U.S. creditors over bonds left over from the country's record 100 billion dollars default in 2001. It was declared in technical default in July for the second time in 13 years after a U.S. judge ruled in favor of holdout creditors who were owed some 15 billion and insisted on payment in full while refusing to provide Argentina with debt relief.

Argentina's U.N. Ambassador Maria Cristina Perceval told the General Assembly that the resolution adopted Monday “is not for Argentina, but rather for Argentina and other developing and developed countries that suffer and continue to suffer.”

“It is to avoid that the so-called vulture funds continue to operate,” Perceval said. “They're only motivated by profit, and what they're doing can only be characterized as unjust, anarchic and unpredictable.”

When the draft resolution was adopted by the assembly's Economic and Financial Committee on Dec. 5, U.S. representative Terri Robl expressed concern that the resolution “would establish a mandate for an expensive U.N. process to address issues that are already being dealt with in other international institutions” including the IMF and the International Capital Markets Association.

Top Comments

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  • Monkeymagic

    A welchers charter....

    Well done Argentina you've just cost millions of lives in the 3rd world.

    Nobody will lend money to poor countries if the repayment is voluntary, and nobody will lend to Latin countries if the only come-back is based on honour.

    Dec 31st, 2014 - 08:34 am 0
  • willi1

    ck and other syndicate members in the UN: Pay your f... debts! that´s the only legal framework to follow. all other framework is robbery. You can be sure to be robbed when ever a dictator is in the mood to stop payments to his creditors to save the money for his own pocket.

    i never again buy government bonds, never!

    Dec 31st, 2014 - 08:57 am 0
  • golfcronie

    Depends what they come up with, but I bet your bottom dollar that the Developed Nations ( ie USA UK CANADA AUSTRALIA ) will probably not buy into the scheme as they would not be sure of getting their money back. The rate of return would have to be very high. And as @1 says CFK and her cronies have effectively killed of millions of poor people.

    Dec 31st, 2014 - 10:30 am 0
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