The following letter under the heading of “Urgent need for legislation on Argentina debt” was published in the Financial Times and refers to the ongoing battle with the holdout hedge funds.The piece is signed by Tim Jones, Policy Officer, Jubilee Debt Campaign, London, N1, UK.
Sir, Following the US Supreme Court’s decision not to hear Argentina’s appeal in the vulture funds case, your editorial is right that “Congress could modify the law to deal more sensibly with US law-governed sovereign debt” (“Ending Argentina's lengthy bond battle”, June 18). It is interesting to consider what such legal changes could be.
In 2010, the UK parliament passed a law which said any company suing one of the 40 heavily indebted poor countries in UK courts for debt payments could only get as much as if they had taken part in HIPC debt relief. The same could be done in the case of Argentina, allowing holdouts only to get as much as the 93 per cent of creditors who agreed to the 2005 and 2010 restructurings. Similar legislation was passed in Greece following its 2012 restructuring to get around deficiencies in collective action clauses.
Such legislation is urgently needed. As is pointed out elsewhere (“Debt ruling leaves Argentina in a quandary”, June 18), any deal with the vulture funds will open up Argentina to even larger claims from restructured bondholders. NML Capital and Aurelius Capital are free riding on the back of the vast majority who restructured the debt, in pursuit of huge profits. If they succeed it will be a defeat for fairness and the ability to deal with debt crises across the world.