Argentine Economy minister Hernán Lorenzino said that the New York appeals court ruling supporting Judge Thomas Griesa decision in favour of paying the hedge funds the 1.3bn dollars they are demanding, was an attempt to take the country back to 2001.
We will carry on paying as we have done up until now, with the same terms, the minister fired after learning of the ruling passed in New York by the Appeals Court.
Lorenzino claimed that there were sectors of Argentine society who want Argentina to become indebted once more to see our people on their knees again, but they will not succeed.
The Second Circuit Appeals Court in New York ruled on Friday in favour of the hedge (‘vulture’) funds, confirming the form of payment as 100% of the stipulated debt. However, the judgement will not be put into action until the US Supreme Court discusses the matter.
In its ruling the three-judge appeals court described Argentina as “a uniquely recalcitrant debtor” and rejected arguments that a ruling in favour of the defaulted debt-holders, led by billionaire hedge fund manager Paul Singer’s Elliott Management Corp. and Aurelius Capital Management LP, would violate its sovereignty and expose it to a fresh financial crisis by threatening a default of the new bonds.
The court also rejected Argentina’s predictions of economic disaster. “What the consequences predicted by Argentina have in common is that they are speculative, hyperbolic and almost entirely of the republic’s own making” US Circuit Judge Barrington Parker wrote in Friday’s opinion. The court basically rejected Argentina’s arguments that a ruling against it would hamper future efforts by overwhelmed debtor nations to restructure their debt.
Meanwhile in New York hedge funds celebrated the decision of the Appeals court. Theodore B. Olson, Elliott Management’s attorney stated: “The ruling confirms that Argentina is not above the law”.
In addition, Olson said it was a “unanimous and a reasonable decision” by the magistrates that “condemns in an appropriate way, the continuous violations of Argentina’s liabilities”.
The American Task Force Argentina (ATFA), which is also financed by Elliot Management, showed signs of conformation. Robert Raben, chief of the AFTA assured that the decision “was a victory for the rule of law, and a defence for the contracts made in the United States”.
“In order to collect billions of dollars, at a low interest rate in the US financial markets, Argentina promised to submit herself under the United States jurisdiction, sticking to New York’s law, and abandoning it’s sovereign immunity”, added Raben.
The ruling means Argentina has been ordered to pay 1.33 billion dollars to bondholders that did not participate in two restructurings following the country's historic 100 billion dollars default more than a decade ago.