The passing of the bill is seen as a major victory for Economy Minister Axel Kicillof (Photo: AFP/Stan HONDA/Télam/dsl)
After several hours of debate, the Senate has approved a government-proposed bill to move payment jurisdiction for its outstanding debts from the United States to Argentina. The measure passed by 39 votes to 27 and will now move to the lower house for final approval next week.
The proposed law aims to resume paying the restructured debts via the Banco de la Nación after US Judge Thomas Griesa blocked Argentina’s payment via Bank of New York Mellon in June, leading to a default on the debt at the end of July. Under the proposal, Buenos Aires is established as the main venue for the payment of debt, with Paris named as an alternative in a last minute concession to opposing blocs.
The bill also declared the 2005 and 2010 debt restructuring to be an issue of public interest, and created a commission to investigate the history of the debt from 1976 until today.
Earlier this year, Judge Griesa banned Argentina from making interest payments on restructured debt until it settles with a group of hedge funds, commonly referred to as vulture funds, who rejected restructuring in 2005 and 2010 and are suing for full payment. The judge ordered that Argentina pay the funds US$1.3bn in addition to the interests, which Argentina refuses to pay saying that it would destroy the nation’s finances.
“Sometimes there are court decisions that cannot be followed,” said Frente para la Victoria senator Miguel Angel Pichetto, who went on to say “those who pay are fools”.
As part of the package of bills approved in the senate yesterday, reforms to the controversial Supply Law —which have been heavily criticised by the business community and the opposition, and supported by consumer rights’ organisations— were also approved by 38 votes to 27.
Two other ‘consumer protection’ bills were also passed, one creating a ‘Price Observatory’ to monitor prices and availability of goods and services, and another one creating a new legal jurisdiction to deal with matters pertaining to consumer rights. All three bills will also now go to the lower house for final approval.
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