Following its back-to-back Supreme Court losses, Argentina is facing a July 30 deadline to pay its creditors or default on its national debt. So how are negotiations going? Not well—arguably, in fact, not at all. Despite repeated assertions that the country will not default, Argentina may not be negotiating with NML, the victorious party in the lawsuit, according to The Economist:
The prevailing assumption is that a deal will be done. But the clock is ticking, and Argentine behaviour since the Supreme Court decision has been erratic, to put it mildly. President Cristina Fernández de Kirchner and Axel Kicillof, her economy minister, have both expressed willingness to negotiate in certain circumstances, only to blast the court ruling and NML in others. They have taken out full-page adverts in American newspapers lambasting Judge Griesa’s decision; Mr Kicillof has delivered impassioned diatribes against vulture funds to the United Nations (UN) and Organisation of American States (OAS).The country’s representatives have met twice with Daniel Pollack, the “Special Master” appointed by Judge Griesa to oversee negotiations, but have yet to meet with anyone from NML itself. In a statement on July 11th, NML vented: “Argentina is still refusing to negotiate with its creditors, either directly or indirectly, about any aspect of this dispute, and we have not heard that it has any plans to change course. Simply put, we have not seen any indication that Argentina is serious about even beginning a negotiation.”
Argentina’s current negotiating stance has been to request various types of extensions on the payment to NML. Since Argentina’s obligation to pay NML at the same time that it pays any other creditor is NML’s main source of leverage, not to mention the whole point of the court cases, it is hard to see the company yielding on this point. Argentina has repeatedly sworn it will not pay the group, which it calls “vultures.”Argentina’s World Cup run provided an exciting distraction for several weeks in the South American republic. But the bill collectors are at the door. Will soberer heads prevail?