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Argentina blames US mediator for debt default | Argentina blames US mediator for debt default |
(34 minutes later) | |
Argentina has blamed the US for its debt default, calling the mediator in failed talks "incompetent". | Argentina has blamed the US for its debt default, calling the mediator in failed talks "incompetent". |
Cabinet Chief Jorge Capitanich said his country was considering opening proceedings at international tribunals in The Hague after it was declared to be in technical default. | Cabinet Chief Jorge Capitanich said his country was considering opening proceedings at international tribunals in The Hague after it was declared to be in technical default. |
The announcement came just hours after last-minute talks in New York with a group of bond-holders failed. | The announcement came just hours after last-minute talks in New York with a group of bond-holders failed. |
The bond-holders are demanding a full pay-out of $1.3bn (£766m). | The bond-holders are demanding a full pay-out of $1.3bn (£766m). |
Argentina says the bond-holders are "vultures" using the South American country's debt problems to make a big profit. | Argentina says the bond-holders are "vultures" using the South American country's debt problems to make a big profit. |
The investors are US hedge funds that bought debt cheaply after Argentina's economic crisis in 2001-2002. | The investors are US hedge funds that bought debt cheaply after Argentina's economic crisis in 2001-2002. |
They are also known as "hold-outs" because they did not sign up to a restructuring of debt which the majority of bond-holders agreed to in 2005 and 2010. | They are also known as "hold-outs" because they did not sign up to a restructuring of debt which the majority of bond-holders agreed to in 2005 and 2010. |
Under that deal, investors agreed to settle for about one-third of what they were originally owed. | Under that deal, investors agreed to settle for about one-third of what they were originally owed. |
However, hedge funds NML and Aurelius Capital Management bought up a large chunk of the remaining distressed debt at low prices. | However, hedge funds NML and Aurelius Capital Management bought up a large chunk of the remaining distressed debt at low prices. |
They demand to be paid the full face value of their holding. | They demand to be paid the full face value of their holding. |
'Shameful handling' | |
Mr Capitanich said Argentina would denounce the "vulture funds" before the International Court of Justice at The Hague and the United Nations General Assembly. | |
He said the US was to blame for it's "shameful" handling of the funds' case against Argentina. | |
"The responsibility lies with a state, that of the United States of America," he said in a news conference at the presidential palace. | |
Mr Capitanich accused the US of "not acting in an adequate manner". | |
The Argentine government had expected the dispute to go all the way to the US Supreme Court, which would have bought the country more time. | |
But in June, the Supreme Court declined to hear Argentina's appeal against the decision of a lower court that made it liable for the money. | |
Under that court's ruling, Argentina cannot use the US financial system to keep paying the restructured bondholders unless it also pays the "vulture funds", placing it in technical default. |