Argentine lawmakers clear debt settlement deal
March 16, 2016
The vote in Argentina's lower house marks an important victory for Argentine President Mauricio Macri, who was elected in November on a platform of reviving the economy and paying off the country's creditors.
The deal is with holdout creditors who refused to go along with the restructuring of Argentina's debt after it defaulted. They were mainly hedge funds that bought up the defaulted debt at discounts, aiming to recover the full value, and in 2012 the New York federal district court ruled in their favor - basically cutting off Argentina from global capital markets.
Macri needs both legislative chambers to clear away legal hurdles put in place under the previous government on repaying creditors with whom his country had been fighting in a US court for years.
The settlement still has to go to Senate, where political observers say it may face stiffer opposition. Especially lawmakers loyal to the previous administration argue against Macri's repayment terms of 70 to 75 cents on the dollar.
In February the Argentine government offered $6.5 billion to resolve their claims of $9 billion. Macri is under pressure to resolve the dispute to regain access to capital markets and attract investors, and has warned that Argentina risked a return to hyperinflation or deep spending cuts without a deal.
jd/hg (Reuters, AFP)