Tuesday, November 10, 2015

Debt restructuring law against 'vulture' actions enacted

The federal government enacted the law declaring the Basic Principles of Sovereign Debt Restructuring of “public order,” following the passing of a resolution on September 10 by the United Nations General Assembly favouring a new global framework for sovereign debt restructurings.

“A sovereign State has the right, in the exercise of its discretionary faculty, to elaborate its macroeconomic policies, including the restructuring of its sovereign debt, a right that must not be frustrated nor obstructed by abusive measures,” the first of the nine principles says.

The decision was published today in the official gazette replicating the UN resolution that avoids that a small portion of a country’s creditors affects the debt restructuring, just like it happened to Argentina in its legal dispute against so called “vulture” funds suing the nation over its defaulted bonds more than a decade ago.

The document demands as well the “impartiality” of all institutions and agents that are involved in the restructuring, “even at regional levels,” exercising no influence in the process or carrying out actions that create conflicts of interests or corruption.