After 15 years of conflicts with holdout creditors and being locked out of global credit markets, Argentina’s President Mauricio Macri has won approval for a repayment deal with creditors in New York. The turning point in the long-running battle is expected to enable the cash-strapped country to emerge from 2001’s $100 billion (£71 billion) default and return to global capital markets while potentially becoming more attractive for investment. After a 12-hour meeting, the Senate has finally approved the repayment package, according to which the country will have to pay the holdouts until 14 April.
The deal comes only 3 months after Macri took office and expressed his commitment to the debt crisis. With groups protesting however, not everyone in the country agrees on the repayment package. Argentina’s ex-president Christina Kirchner had previously refused to negotiate with the holdouts and had declined paying the hedge funds in full. Sen Anabel Fernandez, a member of the youth movement La Campora, said: “They want to sell us a crisis so we buy an expensive debt on bad terms.” The senator has also expressed fears believing that the deal will take Argentina “straight to hell”.
The holdout creditors that are now going to be repaid are the ones who disagreed to a plan of Argentina’s debt restructuring after its default in 2001. The country was sued in the US court because of its refusal to pay $4.7 billion, or about 75% of what Argentina owes to funds.
After debating for 20 hours, the country’s lower house of Congress approved the debt deal on 16 March – 165 votes to 86 supporting the repealing two bills which have been barricading the agreement with creditors. Following a debate in the Senate, where opposition parties have a majority, was approved 54 votes to 16.