British and Argentine campaigners have staged a noisy pots and pans protest outside the offices of Elliot Associates in London, in support of Argentina’s right not to pay the ‘vulture funds’ still chasing huge profits from its late-2001 debt default.
The demonstraation late last week came on the eve of an appeal brought by Argentina against a verdict in October 2012 which could force the South American country to default on its debts once more, and could make sovereign debt crises, including in Europe, much harder to resolve in future.
The protest is part of a campaign organised by the British NGO, Jubilee Debt Campaign in collaboration with the Argentinian organisation Dialogue 2000 - Jubilee South Argentina.
In January 2013 the campaigners placed an advert in the Buenos Aires Herald, welcoming home the Libertad, an Argentinian navy vessel held for three months in a Ghanaian port over the disputed debts. Sister group Jubilee USA also joined the 27 February pots and pans protest.
Argentina is being sued by NML, a subsidiary of vulture fund Elliot Associates. NML bought up Argentine debt cheaply when the country was suffering from a debt crisis at the turn of millennium. In late-2001 Argentina defaulted on its debt payments, which had become unaffordable at the equivalent of 45 per cent of the country’s exports.
Argentina later agreed a deal with most of its creditors to pay 25-35 cents in every dollar that was owed. However, NML have refused to take part in this deal, demanding 100 per cent repayment and exorbitant profits.
In October 2012, the New York court ruled that when Argentina makes payments to the creditors who agreed to the debt deal, it also has to make payment to NML. With repayments to vulture funds illegal under Argentinian law, this may force Argentina to default on its debt payments to all creditors.
Nick Dearden, Director of Jubilee Debt Campaign, said: “We believe there is no ethical justification for Argentina making this payment. These vulture funds never lent money to Argentina. The debt that NML gambled on was bought cheaply, representing the extreme risk they were taking. They took that risk in the hope Argentina would pay them off rather than fight, and they lost.”
When Argentina defaulted in 2001, its people had experienced three years of recession and over half the population - 20 million people - were living below the poverty line.
Much of the debt from this time was regarded as illegitimate by Argentina’s people, originating in the brutal dictatorship of the late 1970s and early 1980s, a period known as the 'dirty war' when 30,000 people were 'disappeared'.
Since defaulting, Argentina’s economy has grown, by an average of 5.9% a year between 2002-2011. Poverty, which grew rapidly through the debt crisis of the 1990s and the turn-of-the-millennium, has now fallen rapidly. In 2002, over 20 per cent of the population lived on less than $2 a day. By 2010 it had fallen to less than 2%.
Mr Dearden added: “Argentina’s recovery since 2002 is down to the fact that the majority of its creditors accepted part payment of their unpayable debts, rather than holding out for full repayment. If the vulture funds are allowed to extract their pound of flesh from Argentina today, we will see a proliferation of vulture funds in Europe tomorrow.”
* Jubilee Debt Campaign: http://www.jubileedebtcampaign.org.uk/