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Argentina lawmakers back debt settlement deal

Saheli March 16, 2016 Business Comments Off on Argentina lawmakers back debt settlement deal

A group of people protest in front of the National Congress of Argentina in Buenos Aires, Argentina, 15 March 2016.

After 20 hours of debate, a majority of 165 to 86 lawmakers voted in favour of repealing two bills which stood in the way of the agreement with creditors.

It is a victory for President Mauricio Macri who struck the deal after his election win in November.

It will now go to the Senate, where it will likely face stiffer opposition.

‘Vulture funds’

The debate in the Senate, where opposition parties have a majority, is scheduled to start later on Wednesday.

Argentine President Mauricio Macri delivers his speech during the opening of the first session of parliament in Buenos Aires, Argentina, 01 March 2016
Image captionThe vote is a victory for President Mauricio Macri

Time is of the essence: under the terms of the deal struck by President Macri with US creditors in New York, Argentina only has until 14 April to pay the holdouts.

These are the creditors who refused to agree to a restructuring of Argentina’s debt after it defaulted on nearly $100bn (£71bn) in 2001.

At the heart of President Macri’s deal is a cash payment of $4.7bn, about 75% of what Argentina owes, to the funds which sued the South American country in a US court over non-payment.

The previous government of President Cristina Fernandez de Kirchner refused to negotiate with the holdouts, whom it called “vulture funds”.

The long-standing dispute has restricted Argentina’s access to international credit markets.

While its Latin American neighbours can borrow with interest rates of about 5%, Argentina has been forced to pay at least double, leaving the country without much-needed financial help.

President Macri had warned lawmakers that a “no” vote would condemn Argentina to continue being a “financial pariah” shunned by global credit markets.

[Source:- BBC News]

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