Argentina again failed to make a payment of $ 500 million, but negotiations to restructure $ 66 billion of its debts are continuing. A source in the Argentine government said, “We do not pay (interest) but negotiations are continuing.” On the Buenos Aires Stock Exchange, the Mirval index recorded a decrease of 1.03% at the close on Friday evening to reach 40,962.76 points. During the week, the stock market rose by 3.99%, while negotiations are continuing between the Argentine government and its creditors.
According to Agence France-Presse, this is the ninth time that Argentina has defaulted on its debt. But the government of left-wing President Alberto Fernandez is seeking to strike an agreement with Argentine bond owners, without starting the default procedures. The Argentine government announced late Thursday to extend the deadline it set for debt restructuring until June 2.
This ten-day extension only suggests that the Argentine government and its creditors can be close to an agreement even though the new deadline for the deadline is not necessarily final, as the government made clear Thursday.
“There is still a great distance to cross, but the most important thing is that all parties are still sitting at the table (of negotiations) to find a solution,” Argentine Economy Minister Martin Guzman said on Friday.
Guzman said that the extension of the negotiations “provides flexibility in the event that (Argentina) decides in the coming days to make amendments (to its proposals) to reach a viable agreement with its creditors.”
These negotiations were supposed to end on May 8th, at the latest. But in the absence of an agreement, it was extended until Friday, on the day that the $ 500 million interest is due and it must be paid.
In total, Argentina’s debt is $ 324 billion, or about ninety percent of its gross domestic product.
Even before the deadline expired, it was clear that Argentina would not respect the payment deadline for this tranche because the government had included three title titles for receivables called 2021, 2026 and 2046 in the debt restructuring plan.
The government asserts that the negotiations are on the right track, but the main group of Argentine creditors conducting the negotiations called for “direct and immediate discussion” on Friday.
The group of creditors said in a statement issued by a number of investment companies, including “Blackrock” and “Fidelity,” it “welcomes the intention expressed by Argentina to work with creditors, but actions are more important than words.”
The statement pointed out that “Argentina has not had any substantive talks in recent months with its creditors.”
Guzmán suggested that the bond owners exchange it for new bonds with a three-year amnesty period with no payments, a 5.4% reduction in capital and 62% on interest. But the creditors rejected the offer and made their proposals, which are being studied by the government. Argentina experienced the worst social and economic crisis in 2001, with a $ 100 billion debt default.
About twenty years later, Argentina faces the same situation. Its economy has been in recession for two years, and inflation has increased dramatically (53 percent) and poverty (33 percent).
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