France is Man Enough to Pari Passu
Just when you thought the world's economic leaders were a bunch of spineless, viewless appeasers who would sell their nearest and dearest to mollify the scary monsters who would eat them anyway ... France saves the day! Confirming rumors that have been floating around for some weeks, the French press reports that France has filed an amicus brief with the U.S. Supreme Court urging review of the Second Circuit decision in NML v. Argentina. The French filing, which appears to be premised on its role chairing the Paris Club of government-to-government creditors, is more significant now that the United States decided not to file uninvited, and dragged the IMF back with it (breaking a lot of china in the process). With France in, the chances of the United States being asked to express its views go way up, and with the United States in, the logic of holding back the IMF disappears. Like the United States and the IMF, the Paris Club is mad-mad-mad at Argentina for failing to repay billions of dollars, but France is evidently more worried about the policy impact of the Second Circuit decision on debt restructuring and the rest of the Paris Club business. If France sticks with it--and theFinance Minister himself sounds pretty committed--stay tuned for a wild ride!
HT Isabelle Couet (Les Echos)
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