Thursday, November 6, 2014

'Vulture funds are the elbola of the financial system'

Economy Minister Axel Kicillof is expected to replace President Kirchner in the upcoming G20 Summit give the head of state has been forced to take a 10-day medical rest.

A negotiation would possible in January considering a different scenario in Argentina’s debt dispute with vulture funds could emerge, Economy Minister Axel Kicillof said calling the groups of creditors suing the country over its defaulted bonds more than a decade ago the “ebola of the financial system.”

“Starting in January, it is possible that after so many pressures they tried to apply, with the position of the President (Cristina Fernández de Kirchner) very clear, attending the law and (refusing) to not giving some bondholders more than what has been given to others, facing that situation they (vulture funds) have not been able to turn, we will probably find another scenario,” Kicillof said in statements to media.

During an interview he granted to the C5N news channel on Wednesday’s night, the minister referred to the RUFO clause which prevents Argentina from voluntarily offering holdout creditors better terms than those of its 2005 and 2010 restructurings. This clause ends on January 31 next year.

Still, an eventual negotiation would follow “the law, the justice, the equality” in order to not give holdout creditors “more than others have been given.”

Kicillof insisted saying that if an agreement with vultures means to “pay a sentence through media extortions” that these groups “are trying to impose” then there will be "no" negotiation.

“I have talked with everybody and I found a very intransigent position of vultures which are the ebola of the financial system.”

"Blue" dollar and inflation

Queried about other issues of Argentina’s economic agenda, Axel Kicillof considered having tightened government controls on the parallel market have moved the so called “blue” dollar down.

“Controls helped to take the blue down. You figure out who sets the (value) of the illegal dollar. There is a suspicion that banks have finance agencies, that they have caves, that they have arbolitos. It is a sort of zoological jungle with several sectors (involved),” the minister said – in Argentina, “arbolitos” are known as the people selling foreign currency illegally on the streets of BA City downtown. Likewise, when the minister talked about “caves” he meant illegal offices were “blue” dollar operations take place.

“There are sectors in Argentina that make millions with devaluations. They send people to buy dollars and create the same wrong they denounce. The one taking the bait is the most uninformed, that who gets informed by TV. What I know is that (the “blue” dollar) reached 16 pesos and today is at 13.60 pesos. So, that caught unaware was sent to by dollars and lost pretty much,” he explained and denied 40-percent inflation estimations by some private-sector consultants and opposition parties.

“Some talk about 40 percent of inflation. There is a lot of confussion. There are some who don’t trust in the prices (revealed by) the INDEC (statistics bureau), although the methodology it works with has been shown, although it works with a more complex calculation than the previous one and that the IMF releases positive reports even when it is no friend of us. They can say 60, 70, 80 percent because they have impunity to say what they want.”