Argentina is not out of the woods when it comes to its financial crisis. A debt deal reached this week has some believing the country’s 15-year battle with creditors might be coming to an end.
CCTV’s Joel Richards reports from Buenos Aires.
History of Argentina's debt crisisArgentina is not out of the woods when it comes to its financial crisis. A debt deal reached this week has some believing the country's 15-year battle with creditors might be coming to an end
In 2001, Argentina defaulted on its $100 billion loan. The country soon found itself in a political, economic, and social crisis. Millions fell into poverty as unemployment soared.
Since that crisis, Argentina has wrestled with finding a solution to pay off creditors. One group refused deals in 2005 and 2010, and they took the country to court demanding full repayment on their bonds.
Under former President Cristina Fernandez de Kirchner, not paying these so-called holdouts was a declaration of economic sovereignty. The country headed a debt restructuring agreement at the United Nations which only six countries voted against.
But as a result, Argentina was excluded from international credit markets, which hit the economy hard. After winning the presidential election in December, Mauricio Macri and his economic team worked fast to strike a deal with creditors in New York.
“It is a relatively acceptable agreement for us in Argentina, but it’s a very bad precedent for the world,” Mario Blejer, former president of Argentina’s Central Bank said.
How the country repays its debt has provoked mixed feelings.
“On the one hand, you have to pay your debts, but on the other are these exorbitant demands and our country becomes more and more indebted and ends up selling off its wealth,” Tamara Rosenberg, a Solidarity Market Coordinator said.
This week, Finance Minister Alfonso Prat-Gay suggested that, despite the agreement, an end to this saga is not so clear-cut. Argentina must pay up by April 14th, but it’s waiting for a ruling on the 13th.
“We can’t pay until court of appeals ratifies what the judge said,” Alfonso Prat-Gay, Argentina Finance Minister said. “Once they ratify, we’ll do what it takes to pay. But I don’t think we’ll be able to issue a bond in one day.”
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