The American Interest
Analysis by Walter Russell Mead & Staff
Argentina’s Libertad Is Free

One part of Argentina’s long national nightmare is finally over. The Libertad, a three-masted training ship and the “pride of Argentina’s navy”, had been held in Ghana’s main port since October. Now thanks to a UN court, the ship has been freed to return home:

On Saturday, the UN Tribunal for the Law of the Sea ordered Ghana to release the ship, arguing that it had immunity because it was a military vessel. [ . . . ]

The court said that holding the ship was “a source of conflict that may endanger friendly relations among states”.

The ship’s seizure had been orchestrated by U.S.-based fund NML Capital, a subsidiary of hedge fund Elliott Capital Management, which claims the Argentine government owes it $370 million on bonds it defaulted on back in 2001 and 2002.

While this one episode may now be over, the humiliations for Argentina and for President Cristina Kirchner’s government will continue. Elliott Management and other bondholders have active lawsuits against Argentina in New York courts, and they have hounded Argentina’s representatives anywhere they can find them—even their booth at the Frankfurt Book Fair.

Meanwhile, the fraudulent nature of Argentina’s economic statistics has reached the point that the country is being threatened with expulsion from the IMF and the G-20. Rioting and looting has spread across the country as waves of new government decrees attempting to cope with foreign currency shortages interfere with normal trade and industrial operations. Although the government’s cooked statistics make it impossible to be sure, independent economists think the country has now fallen into a recession.

Beset and besieged, President Kirchner is yet again resorting to a traditional strategy of Argentine rulers when the cycle turns against them: stirring up anger against Britain over dubious Argentine territorial claims. This time it isn’t the Falklands: the foreign ministry has summoned the British ambassador to express its displeasure with British Foreign Minister William Hague’s announcement that the UK has named a formerly unnamed chunk of Antarctica “Queen Elizabeth Land” to mark the close of the monarch’s jubilee year. The designation changes nothing about the legal situation of conflicting Argentine and British claims to various parts of Antarctica; those claims (and those of Chile and other countries as well) remain on ice, so to speak, under a 1959 treaty.

Published on December 22, 2012 10:00 am