But no, this is a US court apparently telling another sovereign government what to do with its money. Or to be more precise, telling it that it cannot pay a legitimate debt until it has paid off a debt speculator. As a result Argentina has again defaulted on a debt – but this time not because it wants or has to, but because a US court will not allow it not to.
Have a look at http://jubileedebt.org.uk/actions/support-argentinas-fight-against-vulture-funds for more details.
The “vulture fund” which bought Argentine debt in the hope of making a profit may not be a bank or be involved in the lending of money commercially, but it is making use of the system to try to make a substantial profit. If it had accepted the debt write-down agreed by most of (93% of) Argentine’s lenders, it would have made a mere 300% profit, but it is holding out for more.
And the US court support for the speculator’s position is making debt forgiveness even more difficult to achieve for hard-pressed countries around the world.
So, I am campaigning for a moratorium on all commercial debt. This would get rid of this sort of speculation at a stroke.
Of course there are other reasons for my proposal – have a look at the about page and other posts and let me know if you agree.