Argentina will not submit to Wall Street’s “extortion” of their debt, said President Cristina Fernández de Kirchner in a national address Tuesday night.
De Kirchner’s comments came after it was announced that the U.S. Supreme Court refused to hear an appeal by the South American country despite their argument thatobliging predator banks would “encourage creditor free-for-alls” and “intensify and prolong the suffering of the poor in countries undergoing sovereign debt crisis.”
On Wednesday, following news that the Supreme Court would uphold two lower court rulings which demanded that Argentina pay $1.3 billion in debt holdouts to “vulture” funds before repaying their other restructured debts, Standard & Poor lowered the country’s rating to CCC-. According to the credit rating bureau and reported by Bloomberg News, this is the lowest rating for any nation that’s currently assessed by the company and is nine levels below “investment grade.”
“I am blown away by the [Supreme Court] decision,” said Eric LeCompte, executive director of the religious anti-poverty organization Jubilee USA. “For heavily indebted countries trying to support extremely poor people, this is a devastating blow. These hedge funds are equipped with an instrument that forces struggling economies into submission.”
Speaking with The Real News on Tuesday, economist Bill Black explained that the country’s economic troubles began after they “ceded control over their monetary policy to the U.S. Federal Reserve,” which sparked rampant inflation. Argentina was able to restructure their debt with roughly 92 percent of their bond holders. However, U.S. “vulture funds” that owned the remainder of the debt took the South American nation to court demanding full repayment before the other bond holders are recompensated.
During her address, the Argentine president paraphrased the ruling of the district courts, saying that they demanded their portion of the debt be paid “all together, without quotas, right away, now, in cash, ahead of all the rest.”
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