Argentina Rejects G-7 Calls to Address Debt Holdouts (Update2)

[bemildred]

April 16 (Bloomberg) -- Argentina rejected calls by the Group of Seven industrial nations and the International Monetary Fund to settle claims by bondholders who refused to accept the country's offer for restructuring $104 billion of defaulted debt.

``Argentina does not accept discriminatory action or demands in regards to debt restructurings,'' the country's Economy Minister Roberto Lavagna said in a statement distributed in Washington during meetings with the IMF, World Bank and G-7.

The South American nation, which defaulted in 2001, needs support from the U.S. and other G-7 nations to secure a new loan agreement with the IMF. Addressing the bondholders' concerns also would help the country restore credibility among investors in international debt markets, Anoop Singh, the IMF's Western Hemisphere department director, said yesterday.

Bloomberg

[Robbien]

1. Good for Argentina

This is just another ploy by the corporates to keep Argentina under the thumb of the IMF and WTO.

[bemildred]

2. Should the Philippines follow Argentina's lead?

Tsk. This idea of stiffing the banks could spread ...

Ever since Argentina defaulted on debt in 2001, the Philippines has been fending off worries it may do the same.

To counter it, this highly indebted nation is working to strengthen its balance sheet. Yet rather than viewing Argentina as an example of what not to do, should Asia's 12th biggest economy see it as a role model?

As blasphemous as that sounds, Philippine Senator Manuel Villar thinks the answer is a resounding yes. He wants a repudiation of certain government debt issues, and recently even filed a bill to create a "Council for Debt Relief."

Investors can relax; the plan was quickly rejected. Yet with Argentina growing 9 percent, it may be tempting for some Filipino lawmakers to follow its lead. That would be a mistake for one of Asia's most fragile and geo-politically important economies. The costs of blowing off investors could far outweigh the benefits.

Taiwan News