Declaration of Attac Argentina
1 March, 2016, Argentina
8 March 2016 by ATTAC/CADTM Argentina
The worrisome Argentine “Public Debt” has its roots in an illegal and illegitimate debt process. It started with the Dictatorship and involves all governments elected from 1983 up to now. The bonds, that the “vulture funds
Vulture fund Investment funds who buy, on the secondary markets and at a significant discount, bonds once emitted by countries that are having repayment difficulties, from investors who prefer to cut their losses and take what price they can get in order to unload the risk from their books. The Vulture Funds then pursue the issuing country for the full amount of the debt they have purchased, not hesitating to seek decisions before, usually, British or US courts where the law is favourable to creditors. ” are claiming payment of, originate in fraud. This is still the case even though the 1992 Brady Plan converted the original debt into government bonds, in an effort to dissociate it from its improper origin.
Later on, these were the very bonds that defaulted in 2002; that the so-called “vulture funds
Vulture fund Investment funds who buy, on the secondary markets and at a significant discount, bonds once emitted by countries that are having repayment difficulties, from investors who prefer to cut their losses and take what price they can get in order to unload the risk from their books. The Vulture Funds then pursue the issuing country for the full amount of the debt they have purchased, not hesitating to seek decisions before, usually, British or US courts where the law is favourable to creditors. ” then bought up at a very low price with the ultimate aim of claiming 100% of their face value before New York courts, following the decision to refuse new settlement offers (2005/2010). These bonds, as well as those that continue to be issued, contain forum selection clauses in favour of foreign courts. This involves an unconstitutional surrender of our sovereignty.
Since 1983 to date, each administration has tried to manage, rather than challenge, the debt issue. By doing so, each administration has left behind a debt greater than the one it inherited. This is because debt is a usurious system, where a debtor just about manages to meet the deadlines for interest
An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set.
payments by the perpetual refinancing of the principal.
This is how we have arrived at the current situation. Now that the Intra-State borrowing resources used in recent years are exhausted, Macri treads once again the path to foreign markets, seeking new resources, to continue paying the current debt. Whatever the political badge of the government may be, the issue till now was “to honour” the debt and to bypass court rulings and inquiries that clearly proved its illegality and illegitimacy.
As for the intrinsic nature of the agreement with the funds, its financial cost is enormous. As the expert, Héctor Giuliano, declares,
“…on top of the insupportable mass of public debt (exceeding 300 billion dollars) inherited from the Kirchner administration –we add the issue of new bonds to pay for the judgements and claims of holdouts, thus taking out more debt (15-20 billion dollars)”. |1|
But on top of the financial cost, the dispute with the “vulture funds” illustrates the close relationship between debt and free trade. The National Government’s declared intention to conclude several free trade agreements has earned it the favour of the big powers and international financial institutions, which have rapidly come out to express their preference in support of an agreement with the “vulture funds”. While the debtor accepts transnational capital’s liberalizing agenda, global power “facilitates” debt management through access to external financing.
We, ATTAC - Argentina - CADTM AYNA, propose that the payment of public debt be suspended until a Full Audit, with citizens’ participation, determines which parts of this debt are legal and legitimate and which constitute a fraud that must be condemned. For this, we refer to Alejandro Olmos’s invaluable contribution in the so-called “Causa Olmos”, which found that during the period 1976-1982, more than 470 fraudulent loans were made. This is the first step to neutralize a tool that extracts our financial resources and becomes, in the hands of transnational capital, a disciplining instrument to impose a complete package of anti-democratic neoliberal measures, which include: layoffs, austerity, free trade treaties, preferential treatment of foreign investment and lesser rights for our people.
Translated by Anoosha Boralessa and Mike Krolikowski
Guillermo Berganza – Mobile: 1168518395 – email: guillermo17 at gmail.com
María Elena Saludas – Mobile: 3412711700 -email: mesaludas at yahoo.com.ar
Buenos Aires, 29 February 2016 ATTAC – Argentina CADTM – AYNA
|1| Héctor Giuliano «Acuerdos secretos con los Holdouts (Secret agreements with the ’Holdouts’)» (28- 02- 2016)
23 March 2016, by ATTAC/CADTM Argentina
12 September 2013, by ATTAC/CADTM Argentina , CADTM AYNA