MercoPress. South Atlantic News Agency

Argentina insists on dialogue but “technical default” is round the corner, Kicillof tells G77

The Argentine minister addressing G77 plus China ambassadors at the UN building in New York (Pic AP)

Economy minister Axel Kicillof said US courts haven't yet responded to Argentina's request this week for more time to negotiate a settlement with a small group of holdout creditors and warned the country could face a technical default next Monday if the sentence remains firm.

 In a speech in New York on Wednesday to ambassadors from the Group of 77 countries plus China, Kicillof repeated that Argentina is prepared to negotiate “in good faith” with the holdout creditors in a standoff over the nation's defaulted debt, but is requesting for extra time from the courts.

“We asked for a fair treatment but we received no answer,” Kicillof argued, who insisted that Griesa’s ruling “will push our country to a technical default, and into an economic crisis.”

“We cannot let another crisis like the one we had in 2001 happen again,” Kicillof underlined.

Kicillof's appearance at the UN headquarters in New York comes before Argentina is due to make more than 500 million in interest payments on June 30 on restructured bonds. Argentina can't pay holders of those bonds unless it also pays the holdouts, according to an order from US Judge Thomas Griesa.

If Argentina misses Monday's payment, the country will sink into technical default, although it has another 30-day grace period to make up the payment.

Kicillof also announced in the news conference that the G-77, which represents developing countries as well as large emerging economies such as Brazil, India and China at the U.N., will send letters to the U.S. government and to Judge Griesa to express their concern over the recent ruling and to ask that Judge Griesa allow negotiations to occur under “fair and equitable” conditions.

“What we're asking is we not just have three days and run the risk of defaulting,” Kicillof said on Wednesday. Without extra time “it will not be possible in such a short time to bear in mind all factors and risks involved in any decision made by Argentina.”

Kicillof declined to elaborate on where Argentina would be willing to compromise with holdouts, but he said the country is “willing to evaluate all options bearing in mind legal obligations.”

The minister also revealed he met with Argentina's lawyers during his brief visit to New York but has no plans to meet with the holdouts before he returns to Buenos Aires that same Wednesday night.