Argentina’s Axel Kicillof knows there are challenges in front of him
As he landed in New York today, Argentine Economy Minister Axel Kicillof knows he has a difficult challenge in front of him. In 2002 the country faced the reality it borrowed too much money – money that it claims it couldn’t afford to repay then and now. It defaulted on this debt and now, after losing brutal battles in the US Supreme Court, they must pay the piper.
Kicillof was scheduled to meet today with Daniel Pollack, appointed by U.S. District Judge Thomas Griesa in New York to find common ground in the often contentious dispute. As he strolled into his Park Avenue office mid-morning, Pollack declined to comment. “I have been very careful not to say anything,” he told a Reuters reporter.
Argentina cannot not afford debt repayments
Argentina has said that it cannot afford to repay the debt and indications are if a workable compromise is not found they could default. Match this against aggressive hedge funds, termed “vultures” by Argentine officials, who are ready to sink their teeth into Argentine red meat and playing the referee in this heavyweight bout could be rather interesting for Kicillof, but not necessarily a new role. Kicillof has sealed a number of deals with foreign investors and creditors over the past few months, a report noted. Perhaps most significant of these was the Paris Club agreement, which put on display Kicillof’s diplomatic chops that will most certainly be needed for what could be the biggest negotiation of his career.
Waiting at the other end of the negotiations is Elliott Management, which created a web site that humorously includes a clock keeping track of how long Argentina has avoided negotiations since the US Supreme Court decision – to the minute.
Judging from the tone of Elliott’s web site, Argentina’s negotiations are likely to be more cordial with Kicillof than they would be with Elliott, if such negotiations ever take place. The web site includes articles such as “Is Argentina Being Forced Into Default,” and takes on controversial topics such as “Can Argentina Afford to Pay.” While Elliott Management might be licking its legal chops waiting for Argentina to walk through the door, it could be Kicillof who is the real point of negotiation in this battle.