MercoPress. South Atlantic News Agency

Germany takes distance from 'holdouts' controversy and praises Argentina

Capitanich lashed out at Germany's finance minister, denouncing Berlin's “hostile attitude” toward Argentina's debt restructuring effort.

Angela Merkel’s administration attempted to lower tensions with the Argentine government on Thursday following controversial statements made by German Finance Minister Wolfgang Schauble regarding the so called 'holdouts' or 'vulture funds' conflict.

 “The relations between Germany and Argentina are traditionally good. We want to resolve in a constructive way our pending matters, and we are looking to cooperate with the Argentine government,” a spokesperson from Germany’s Foreign Service said.

The unnamed source told Germany's DPA news agency that “building trust is an important step,” and he recalled that Argentina has recently “paid punctually and totally,” its first quota to the Paris Club; a financial entity of 20 countries including Germany.

A month ago, the German official described Argentina as “an example of lack of solidity”; a comment which the American Task Force Argentina (ATFA) organization quoted in an ad published on Wednesday on the Buenos Aires media.

The ATFA defined Schauble’s comments as “wise”, while adding they are an example of criticism against “president Cristina Fernández de Kirchner’s despise for US Courts and Argentina’s refusal to pay its debts”.

On Wednesday Argentine Cabinet Chief Jorge Capitanich lashed out at Germany's finance minister, denouncing Berlin's “hostile attitude” toward Argentina's debt restructuring effort. He added that Germany had always had a hostile attitude toward Argentina from an economic and financial point of view

Capitanich also noted that Germany was among 11 countries that voted against Argentina's proposal at the United Nations to adopt a multilateral legal framework for sovereign restructurings. On September 9, the UN resolution easily passed, but Germany joined the United States in voting no, arguing that market-based mechanisms are the best way of curing defaults.

“You have to wonder why the big powers of the world do not have a firm attitude toward these miniscule groups that pulverize any possibility of allowing the international financial system to function properly,” Capitanich said, suggesting that Germany might have been “co-opted by the vulture funds.”