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Argentina blames US, 'incompetent' judge for default

AFP | Last Updated: Friday, August 1, 2014 - 01:18

Buenos Aires: Argentina on Thursday blamed the United States for the legal battle that forced it into its second default in 13 years, accusing the judge and mediator in the case of "incompetence”.

The country officially went into default yesterday after the failure of 11th-hour talks with two US hedge funds that refused to accept a write-down on their Argentine bonds.

Argentine stocks plummeted today as the repercussions of the default began to set in, and were down 6.45 percent in afternoon trade.

Argentine President Cristina Kirchner's Cabinet chief, Jorge Capitanich, blamed the American government for the default, brought on by a US court ruling that blocked Buenos Aires from servicing its restructured debt without also paying the hedge funds in full.

"If there's a judge who's an agent of these speculative funds, if the mediator is their agent, what is this justice you're talking about? There's a responsibility of the state here, of the United States, to create the conditions for the unconditional respect of other countries' sovereignty," he told a press conference in Buenos Aires.

He accused US District Judge Thomas Griesa and court-appointed mediator Dan Pollack of "incompetence" and said Argentina would take the matter to international courts.

Kirchner was due to give a nationally televised address today evening.
Griesa, meanwhile, set a hearing on the case for tomorrow at 11 am (1500 GMT), a court spokeswoman told a news agency.

The failure of the marathon talks between Argentine Economy Minister Axel Kicillof and hedge funds NML Capital and Aurelius Capital Management caused Argentina to miss a payment on the debt it restructured after its 2001 economic crisis.

Ratings agency Standard & Poor's placed Argentina in "selective default" for missing the USD 539-million payment.

Griesa has barred the country from paying "exchange creditors" who accepted a 70-percent write-down on their bonds without also paying the so-called "holdouts" the full USD 1.3 billion it owes them.

Argentina says paying the holdouts could expose it to claims for up to USD 100 billion from exchange creditors, who are entitled to equal treatment under what is called a Rights Upon Future Offers, or RUFO, clause.

Hedge fund NML said Argentina bore full responsibility for its own default.

First Published: Friday, August 1, 2014 - 01:18
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