Economic justice group Jubilee Debt Campaign has uncovered documents which show that Argentina still owes debts to the UK government, following arms sales to the Argentine junta in the years leading up to the Falklands War.
The archived information includes a letter from then Foreign Secretary David Owen, which shows the British government was keenly aware of the odious nature of the Argentina regime - describing it as ‘worse’ than Pinochet’s Chile. It also acknowledged that conflict over the Falkland Islands was possible.
Argentina’s £45 million restructured debt includes loans for two Type 42 Destroyers and two Lynx helicopter which were used in the invasion of the Falklands.
The debt overhang left by Argentina’s military junta was not cancelled, despite a court case in 2000 finding that loans to Argentina under the dictatorship were part of "a damaging economic policy that forced on its knees through various methods ... and which tended to benefit and support private companies - national and foreign - to the detriment of society". These loans ultimately helped fuel Argentina’s economic crisis in the early 2000s.
The loans were run up by a government department called the Export Credits Guarantee Department - which has recently changed its name to UK Export Finance.
The Liberal Democrats have a policy to audit all the debt owed to UK Export Finance and cancel those found to have come from “reckless loans to dictators known not to be committed to spending the funds on development”.
Nick Dearden, Director of Jubilee Debt Campaign said: "Lending the military junta money to buy British weapons was illegitimate and odious. The newly uncovered documents show that then Foreign Secretary David Owen knew the UK government was lending money for arms to an abhorrent regime. The Liberal Democrats must stick to their pledge to rule invalid loans recklessly given to dictators.
"This is not the only occasion in which debt has been run up supplying arms to a regime which British soldiers would soon be fighting. The anniversary of the Falklands War should force the government to question the way it does business. Business Minister Vince Cable must implement Liberal Democrat policy and stop subsidising war through the backing of loans to other governments to buy weapons."