The Alberto Fernández government tries to renegotiate the country's public debt with the capitalist barons who speculate on the quality of life of the population
Argentina has historically had periods of intense crisis due to the debts incurred, such as those the turn of the 90s to the 2000s and more recently with the Macri government, which incurred an absurd debt with the International Monetary Fund (IMF).
President Alberto Fernández's current government has just made a new offer to his creditors, whose debt is being charged in dollars. It would be about $ 66 billion more than the initial offer to be paid by public coffers in an attempt to force a deal.
The government's proposal must first be published in the Official Gazette and then filed with the SEC (Securities Commission) in New York. A government source told Agence France-Presse that the new proposal “is close to $ 53 ″ for each $ 100 paper.
The first offer would have been $ 39 per share of $ 100 and was rejected by most capitalist creditors.
In an interview with Argentine radio Milenium, President Fernández said about the new offer: “It will be open until the end of August. It is a huge effort that we are making. It is the maximum effort we can make, ”said the president.
The external debt problem was aggravated by the neoliberal macrist regime that privatized a series of public companies and entire branches of the Argentine economy, which raised water, energy, gas, transportation and other services. All this in order to be able to pay the loans for investments made in the country.
Logically, as always, this money given to creditors was not enough to settle the debt, on the contrary: it is increasing more and more.
Now it is Fernández who is pushing the negotiations with his belly, but there is not much way out: it is necessary to cancel the payment of debts, because they are illegal debts - just remember that, in Ecuador, an audit was carried out during Correa's time that proved that most of the country's foreign debt was a fraud to fill capitalists' pockets.
The IMF and the big banks are leeches of the oppressed nations and the debts only serve to enslave them further, privatizing public services and lowering the quality of life of the people.
The Argentine negotiations with the capitalist creditors were due to expire on July 24. The operation follows US law. Even so, the Fernández government decided to extend them for the seventh time, until next August 28.
Creditor accused of “lack of commitment”
The Argentine government has proposed a swap for these debt security holders, but has not yet reached an understanding of interest rate cuts and grace periods. In finance, swap is an operation in which there is an exchange of positions regarding risk and profitability among investors. The exchange contract may have as its object currencies, commodities or financial assets. Swap is a derivative contract. It can be used for protection or as a speculative investment.
Economy Minister Martín Guzmán admitted "big differences" with the group of Ad Hoc shareholders, including the powerful investment fund Blackrock, which accused the Argentine government of "lack of commitment" in its proposal to advance the negotiation.
"The Ad Hoc and Exchange groups want to make it clear that since June 17, there has been no significant progress with the Argentine authorities," said these two groups, who represent bond holders of around US $ 21 billion, in a statement released last week. . They also said that they were ready to reach a "sustainable consensus agreement for Argentina and creditors".
Possibility of legal action
For both sides, the agreement must be reached as soon as possible. Last week, interest on other securities earned about $ 600 million, although they have a grace period of another month before going into default.
Default means the borrower's failure to comply with a clause in a loan agreement. In general, the term is used when the debtor fails to pay his debt correctly, because he does not want to or because he cannot.
The Ad Hoc Group had described the negotiations weeks ago as a "failure" and warned that it evaluates the payment claim in the New York courts. The securities that Argentina intends to exchange were issued under foreign legislation, making them susceptible to actions abroad. This negotiation includes titles 2005 and 2010, the product of a previous restructuring, and others placed in 2016 with Maurício Macri at the head of the country.