Argentina in default but creditor negotiations continue

Published May 23, 2020, 12:00 AM

by manilabulletin_admin

By Agence France-Presse

Argentina defaulted on Friday for the second time in less than 20 years after failing to pay $500 million of interest on its bond debt, but it continues to negotiate a restructure with creditors, Finance Minister Martin Guzman said.

Finance minister Martin Guzman during a during a livestreamed event hosted by the US Chamber of Commerce in Buenos Aires on May 19, 2020 (Argentina's Economy Ministry/AFP/File / MANILA BULLETIN)
Finance minister Martin Guzman during a during a livestreamed event hosted by the US Chamber of Commerce in Buenos Aires on May 19, 2020 (Argentina’s Economy Ministry/AFP/File / MANILA BULLETIN)

“There is still a significant distance to go but, more importantly, all sides remain at the table to find a solution,” he said.

The default — Argentina’s ninth overall — was widely expected after the economic ministry announced on Thursday that it was extending, for a second time, talks with international creditors on restructuring $66 billion of its debt. The new deadline is June 2.

President Alberto Fernandez’s government is expecting to come to an agreement before Argentina suffers the full effects of its default.

Thursday’s announcement of the extension “provides flexibility in case the Republic decides to make modifications in the coming days to ensure a sustainable agreement with our creditors,” Guzman said.

The crisis-wracked South American country, which has been in recession for two years, currently owes $324 billion, amounting to around 90 percent of its GDP.

The crisis was aggravated when its economy was hit — like others all over the world — by the coronavirus pandemic.

Though it is one of the world leaders in food exports, Argentina has already defaulted eight times in its history, most recently in 2001 when it owed $100 billion.

That triggered a painful social and economic crisis.

 
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