sexta-feira, 1 de agosto de 2014

Argentina: what changed in 13 years?

The Germany is the main individual holder of debt argentina and announced the country "continue to respect their commitments", not least because, just two days ago, was settled a tranche of 650 million dollars.

Without the failure scenario, the Argentina presents a economic retreat of nearly 1.5 percent and an inflation of 34.5%; installing the default, Buenos Aires risks a contraction of 3.5% and an inflation to exceed 40%. On 23 June, the Argentine Statistics Office had officially announced the entry into recession.

The collapse between the years of 2001 and 2002 launched millions of Argentines into unemployment, causing unprecedented chaos and social collapse.

The International Swaps and Derivatives Association is to assess whether, in fact, failure is due purely to a legal context or if corresponds to an actual problem of credit. If this is the case, the current creditors of Argentina can claim the money with immediate effect.

euronews: the news isn't the best for Argentina, having reached agreement with the American vulture funds before the deadline. The Government says it is not in default... What is the actual situation?

Rafael Di Giorno: For credit rating agencies, the reality is that this is a failure to the extent that the holders of the bonds did not receive payments. But it is not a "typical" failure, because the truth is that Argentina's capacity to pay. The money was sent to the banks in question, but there's a legal block that prevents him coming at the hands of creditors.

euronews: it is speculated that Argentine private banks could buy the debt to speculative funds. It would be an operation supported by the Government or an independent initiative?

RDG: the official version is that the Government can't negotiate directly with speculative funds. So take precautions to not be mentioned in these processes. This plan is a private sector initiative, the ADEBA, which is the camera which brings together Argentine banks. They proposed a deal with the speculative funds, suggesting to put an amount as a guarantee by the end of this year, when expire the clauses that prevent Argentina to negotiate with the vulture funds. If they accept, there may be a solution. And then Yes, the Argentina can negotiate directly with these funds.

euronews: Will investors flee from Argentina? Will the recession worsen and reach the population as during the bankruptcy of 2001?

RDG: no, the bankruptcy of 2001 happened in a serious context, motivated by other factors. At that time, the Argentine GDP fell by about 11%, a brutal fall. This year, estimates indicate a recession scenario, but in the order of 1 to 2%. Is a much more benign context, is a more technical default. The Argentina's ability to pay, although there is a legal issue that prevents you from doing so. The truth is that we need to regulate all debts of 2001 to move forward. However, there will be a huge capital flight. In recent years, there has been a huge capital input. There's going to be, Yes, problems in the financing of large projects such as Cow Muerta, oil company YPF, which require external capital.

euronews: there will be no consequences in America or in Europe?

DRG: I don't believe there's any contagion to other countries, because it is not a failure because of the balance of payments or because there are no dollars on reservations. There, there could be more contagion due to the impact on the currency. But I do not believe that to be the case.

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