Argentina is a defiant rogue in financial circles. That’s because in 2001, the country told hundreds of banks, organizations and individuals to take it or leave it. They defaulted on more than $100 million in debt, offering pennies on the dollar to the people who loaned them all the money they squandered. It’s all coming back to haunt the administration of Cristina Kirchner, whose husband used to be president, as reported in the WSJ this week.
President Kirchner was about to take a trip to Asia and Africa, but they didn’t want to use the regular presidential plane, named Tango 01. That’s because a few times they’ve flown overseas, those pesky creditors have attached liens to the plane and prevented it from leaving. So plans call for spending about 20% more for the weeklong trade mission by chartering a different plane, one that can’t be grabbed by who Kirchner calls “vulture funds.”
In Ghana last month, one of the German companies stiffed by Argentina tried to put a hold on a navy training ship and kept the sailing vessel impounded for a month. Argentina was able to get it released by an international trade group, but not without a fight. The creditors were incensed that their tactic didn’t work, but Kirchner is defiant. All over the world, banks are regretting lending money to their government, who is also famous for deciding to force their own citizens to convert their IRAs into government run funds, losing millions of dollars in value. People are not pleased, and stay tuned. Some day Argentina is going to have to pay for stiffing the world.
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