Sunday, March 13, 2016

Peronists mull time-out on holdouts bill

Senators Juan Manuel Abal Medina (left), José Alperovich (centre) and Miguel Ángel Pichetto speak in a file photo.

Pichetto urges government to explain extent of US appeals court ruling on injunction

Faced with the decision by a United States appeals court to put on hold the ruling lifting injunction against Argentina barring it from paying off its debt, the Victory Front (FpV) has renewed its concerns over the holdout bill tabled by the Mauricio Macri administration and seems to be eager to use time to its advantage.

“The decision requires a further analysis of the content of the sentence, because it includes a new event that was not foreseen by the government. It sets up a latent risk that Argentine will remain trapped, even if it pays the restructured bondholders, given the possibility that a fresh injunction will be imposed by the appeals court that prevents it from paying,” said Senator Miguel Pichetto, the leader of the FpV caucus in the Upper House, in light of the decision by the Second US Circuit Court of Appeals in New York to confirm the March 2 ruling by US District Judge Thomas Griesa until it could hear an appeal.

At press time Justicialist Lower House lawmakers, who recently defected from the FpV caucus, echoed Pichetto’s concern.

Argentina still has until April 14 to pay the US$4.65 billion deal with the largest holdouts and needs Congress to approve a bill repealing two laws and authorizing a bond issuance to do so.

Pichetto has been among the most pro-dialogue members of the FpV, which has an overwhelming majority in the Senate, but his statement yesterday raised fresh questions.

After clearing a Lower House committee this week with some amendments, a vote has been scheduled for Tuesday. The centre-right ruling coalition Let’s Change (Cambiemos) has expressed confidence that it has the necessary support from circumstantial allies in the form of the Renewal Front and the Justicialist caucus to overcome the fact that it is in the minority.

A statement released by Pichetto said that the decision made by the US appellate tribunal “has a full impact on the negotiations and the proposals of the Argentine government as the appeals court takes on jurisdiction in following the filings of other creditors who have not accepted the agreements settled by Griesa.”

According to court documents, Argentina did not oppose the creditors’ request to stay the order. It had earlier secured an expedited appeal, arguing that “without prompt resolution, settlement of the largest claims in this long-running litigation may be in jeopardy.”

Argentina filed the request to lift the injunctions after offering on February 5 to pay US$6.5 billion to settle lawsuits by various bondholders stemming from its record US$100- billion default in 2002. The country has reached agreements in principle to pay more than US$6.4 billion to creditors, including US$4.65 billion to four of the biggest creditors — which have to be paid before April 14.

The FpV’s leader in the Senate recalled that the entire point of the settlement with holdout creditors is to obtain access to international credit markets and for Argentina to meet its obligations to restructured bondholders who have not received payments due to injunctions set by Griesa.

Pichetto urged the government to clarify the situation and to determine which of the holdout creditors had appealed Griesa’s injunction before Congress can vote on the holdouts bill.

The PRO’s Eduardo Amadeo, who chairs the Lower House Finance Committee, told Radio Mitre yesterday that he expected the Senate to approve the bill because it “represents the provinces, and what greater interest is there for the provinces than to have access to credit for infrastructure at reasonable rates.”

On Thursday, Interior Minister Rogelio Frigerio welcomed governors at the Pink House to discuss tax-revenue shares ahead of the next week’s key vote in an attempt to unlock negotiations in the Upper House, where the majority of the seats are in Peronists’ hands.

Vowing to fight

In addition,the FpV in the Lower House yesterday made another appeal for their colleagues from other caucuses to vote against the government’s holdouts bill. The chair of the FpV caucus, Héctor Recalde, said the government will probably rally enough support to discuss the bill that seeks to secure an agreement with so-called “vulture” funds on the floor, but warned the approval of the project is not yet guaranteed.

“We will put every effort, knowledge and convictions to have the bill rejected, because the deal is very bad. Some sectors had opposed it and now they changed their position,” Recalde said.

In statements to the C5N news channel, the lawmaker yesterday said former president Cristina Fernández de Kirchner’s administration also sought an agreement to end the long-standing dispute with creditors that did not accept the 2005 and 2010 debt restructurings but “without kneeling down.”

“In the previous government, we were willing to agree but without kneeling down. The government goes into debt but it is the people who pay. We want to end with the foreign debt but standing, not on our knees,” he said.

“Argentine history shows what happens. We will pay 230 million dollars to the vulture funds’ lawyers without having a judge deciding it. We will pay even more than what we paid to some small group of creditors,” Recalde insisted.

On Friday, FpV lawmakers filed a criminal complaint against their counterparts Nicolás Massot (Let’s Change) and Diego Bossio (Justicialist) over suspected bribery after pictures of conversation between Massot and Bossio on an instant messaging application were published on Thursday. Both Bossio and Massot have acknowledged that the pictures were genuine and that there was nothing untoward about their conversation

FpV lawmaker Juan Cabandié, also a member of the FpV’s La Cámpora youth wing, said yesterday in conversation with Radio 10 that “the PRO should suspend the Tuesday vote until the conversation between Bossio and Massot can be cleared up. The law cannot be stained with doubts and suspicions.”

In addition to criticizing the terms of the multi-billion dollar agreement with various creditors, Cabandié also implored the government to “start its relationship with Congress on good terms.” The holdouts bill is the first piece of legislation that Macri has sent to Congress as president.

Herald staff with DyN, Télam