La Nacion
Kerry rules out U.S. help in dispute with the vulture funds
The American Secretary of State said that the Obama government “will not put itself” on Argentina’s side, despite the efforts pushed by Timerman
Thursday, March 13, 2014
By Silvia Pisani
WASHINGTON.- With just one sentence, the U.S. Secretary of State, John Kerry, tossed out the main card that Argentina hoped to count on in its litigation with the vulture funds before the Supreme Court of this country. Kerry assured that the government of Barack Obama “will not put itself” on Argentina’s side in the case that the highest court requests an opinion before adopting a decision about the case in which a new default by the country is in play.
"I can reply to that very quickly. And the response is no, we will not do so,” he answered publicly when a Republican legislator asked yesterday if the State Department would take a position in favor of Argentina in case the Court’s justices ask it for an opinion about the decisive judicial round.
Until now, the possibility that the Obama government would file an "amicus curiae" –as such filings are known – in favor of the Argentine government was one of the swords that the government of Cristina Kirchner had hoped to count on when the Court justices decide the case.
Ambassador Cecilia Nahón has been making intense efforts to achieve that support, and even Foreign Minister Héctor Timerman came to say publicly that the Obama government would give that backing. But yesterday Kerry seemed to sweep those expectations away with one stroke.
While in his affirmation he didn’t mention the Department of the Treasury – which is the team that technically handles these kinds of questions – diplomatic sources consulted by LA NACION yesterday put in doubt the possibility of a range of opinions regarding who carries out the country’s foreign policy.
By the margin of what this turn could mean in the decisive judicial battle, what Kerry produced yesterday was the most important political definition that has been known until now about relations with Argentina.
On the same occasion, the head of American diplomacy assured that the Obama government “will continue pressing” Argentina to honor its debt and pending commitments. Among them, “the 600 million dollars” that it owes the United States, in reference to the U.S. portion of the approximately US$9 billion that is owed to the Paris Club. “I will do everything possible to achieve that, the State Department will do everything possible,” Kerry promised.
In equal fashion, he said that he will keep up that pressure for Argentina “to honor” its creditors, “both public and private.” While he did not do so expressly, the statement is in line, precisely, with the desire of the holders of debt bonds in default that sued the country and have been obtaining favorable rulings in the courts. At the same time, and as a counterpart, Kerry pondered the benefits of “keeping up the pressure” on the Argentine government. “We have urged them to pay their debts, and under that pressure they have taken some positive steps,” said the head of American diplomacy.
He listed, among them, the payment of judgments in favor of American companies in the arbitral tribunal of the World Bank (ICSID), as well as the production of “a new inflation index in response to the complaints of inaccuracy by the International Monetary Fund.” Beyond that, he promised that his department “will continue pressing” for the country “to fully honor all its international obligations.”
Yesterday was the second time that Kerry had referred publicly to the “financial non-compliances” of Argentina. The first was almost a year ago, when he told the Senate about his plans on foreign policy matters. It was when he cited the need for the country to “honor” its commitments.
The second was yesterday, when he evaluated projects of the State Department before the Committee on Foreign Government Operations and Related Programs in the House of Representatives.
The government admitted that if the adverse rulings that are accumulating end up being upheld, the country could enter into a new default. Unless the extrajudicial negotiations succeeds which, according to non-official sources for several weeks, have been explored in a secret manner.
Arguments from the holdouts
WASHINGTON.- It could have been a coincidence, but one of the arguments used by the legislator Díaz Balart in his question to Kerry coincided with the campaign just launched by American Task Force Argentina (ATFA), one of the main holdout groups. With paid ads in the main outlets of this city, the campaign points to a video of the moment, in the middle of the lawsuit, in which Argentina’s attorney, Jonathan Blackman, admits that in case of an adverse ruling, the government “will not voluntarily comply.” “It’s time that Argentina abides by the law. That it stops laughing at American courts,” says the ATFA campaign, in line with one of the arguments made yesterday before Kerry.
Clarin
Fight deepens with the vulture funds over the debt
Thursday, March 13, 2014
by Ana Barón
New York. Correspondent – The war between Argentina and the vulture funds has two dimensions: the legal and the political. While at the end of combat, the legal one will determine the winner, currently the political battle in Washington is what is hot.
What is in play is the help that the U.S. could give Argentina by asking the Supreme Court to analyst the Argentine government’s appeal that was recently filed.
As part of the offensive that she is leading, the Argentine ambassador to the White House, Cecilia Nahón, organized a conference in which attorney Paul Clement (hired by the government) explained to approximately 100 officials, diplomats and experts the Argentine legal position. One week later, Nahon also distributed, by internet, a document which explains the same but in much simpler and didactic terms. ATFA, the lobby organization in the name of the vulture funds counterattacked yesterday with a paid ad in the most important newspapers of Washington, among them The Washington Post. More still, ATFA also got eight legislators to send a letter asking the Treasury to demand that Argentina “honor its obligations with its creditors.”
“Would you tell a judge that you were going to break the law? Well, that’s exactly what Argentina did,” says the ad reproducing the dialogue in which Argentina’s attorney, Jonathan Blackman, said to Reena Raggi, one of the judges on the Court of Appeals in New York that Argentina “will not voluntarily obey” the ruling of Judge Griesa that impedes Argentina from paying if it doesn’t pay those who didn’t enter (the vulture funds) if it were upheld. “Really?” asks the judge.
The goal of the ad as well as the letter from the legislators is to reinforce the image of Argentina not honoring the rulings or its international obligations.
But after years of rebellion, Argentina has begun to honor what the U.S. has been asking it to. The government paid rulings of the ICSID and made payment to Repsol. It started negotiations to pay the Paris Club and presented a new inflation index before the IMF. Will this turn yield a result?
U.S. legal support for Argentina for now has not worked on the underlying issue. For now, all the courts have ruled in favor of the vultures. But if the U.S. intercedes, asking that they hear the Argentine appeal, it will increase the chance that they will accept the case.
Infobae
Lapidary diagnosis in the U.S. about the country’s course
Thursday, March 13, 2014
The Center for Strategic and International Studies, a well-known think tank in Washington, put out a harsh report against the government. The latest economic measures, corruption and the rise of drug trafficking, were the focus of the analysis.
Put together by journalist Douglas Farah, the report released by the center (CSIS) entitled “One step forward, two steps back: the Argentine tango towards collapse,” represents a new warning signal that has arisen on American soil about the policies of Kirchnerism and the country’s course. The analysis states that “without a significant course change, the situation will become unsustainable.”
What backs up such a somber outlook? Farah puts special emphasis on three aspects: economic administration, which he tears apart; the expansion of drug trafficking, which he links to the government; and “massive corruption.”
"Different from other challenges that emerging markets face, Argentina’s difficulties have been self-inflicted, resulting from poor governing, corruption, the lack of transparency and the creeping advance of authoritarianism,” he says.
The reporter highlights that one year since the last evaluation from that think tank, “the situation has deteriorated in a significant manner” and argues that “what has contributed even more to the growing sense of crisis is the general lack of leadership by the president (Cristina Kirchner), who is in a delicate state of health and governs mainly via Twitter.”
"The results of current economic policies, together with the lack of leadership and indifference to applying the law, have been, as one could expect, catastrophic,” he says. And he aims against the spaces gained by La Cámpora in the area: “Through a bank controlled by the state, they control opaque trust funds that channel hundreds of millions of dollars toward projects that often exist only on paper.”
The document questions several of the latest measures adopted by the government, like controls on prices and currency exchange. He emphasizes that while the new CPI from the INDEC was “a modest step of using real and not imaginary numbers, received as a signal of a new pragmatism in the radical populist government.”
"Each small measure taken reluctantly, from paying a few of the dozens of legal cases pending at the World Bank, to trying to open talks with the Paris Club for rescuing its extremely low credit rating – partly cover over the precipitous slide by the government towards economic, political and social collapse,” he states. “Behind the modest efforts to rejoin the global economic community, one finds a chaotic government that is increasingly more authoritarian.”
The association between La Campora and alleged cases of corruption is not the only mention that the report made about this problem. In fact, it has a large section on the analysis of the investigation of businessman Lázaro Báez for alleged money laundering efforts. And it briefly goes over the cases against Vice President Amado Boudou.
Another one of the harshest criticisms against the ruling party points to its policies against drug trafficking. In this regard, it argues that the hierarchy of the Catholic Church has "been increasingly more vocal about the government’s complicity.”
It recalls that Defense Minister Agustó Rossi admitted that the Argentina has become a drug-producing country and noted: "This brief attempt to face reality - given the proliferation of cocaine and the methamphetamine labs that have been uncovered, and the increased consumption among Argentines as described below - is not supported by the rest of the administration, whose Orwellian statements about issues ranging from the economy of drug trafficking to the freedom of the press reflect a world of fantasy and not reality."
"The present panoramic view shows how the government has opted for the path of authoritarianism, corruption, and opacity," he concludes. "It is unlikely that it will be the source of a profound change."
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