Jorge Capitanich Criticized the US, Judge Griesa and the Hedge Fund Mediator

Cabinet Chief Jorge Capitanich says it is an “absurd falsehood” to say that the country is in default.

“Argentina has paid, therefore the funds do not belong to Argentina, they belong to the bondholders. They should demand their payment. We have to acknowledge the responsibility of the fiduciary funds, of the financial agents and of the bondholders, who should demand from the judge that they receive the funds,” said Jorge Capitanich this morning.

In his regular press conference, the cabinet chief issued strong criticism not only against Judge Griesa, but also against mediator Daniel Pollack — who is still in charge of facilitating conversations between Argentina and the holdouts — Barack Obama’s government and even the international community as a whole.

Capitanich stated that both the magistrate and the special master assigned to facilitate the conversations “are vulture-fund agents” who want to give them “1,608 percent profits.” The government official also criticized the judicial branch and the government of the U.S.

“The sentence was upheld at all levels of the judicial branch. The U.S. is responsible for not acting properly with regard to this malpractice. Don’t use the excuse that the U.S. judicial branch is independent. It is independent from reason and from decisions that are incompatible with the international financial system, but it is not independent from the vulture funds.”

An Agreement between Private Parties

Also, Capitanich denied any contact with banks that are privately negotiating the purchase of the debt.

This negotiation did not yield an agreement on Wednesday, although according to [newspaper] Tiempo Argentino, part of the Argentine delegation stayed in New York and the negotiations will continue this Thursday, especially taking into account that the [so-called] vulture funds did not issue any statement saying the negotiations had failed.

Market rumors indicate that the Association of Argentine Private Capital Banks, an association of Argentine financial institutions, is working on some type of agreement to acquire the defaulted bonds and, later, negotiate repayment with the government.

Capitanich highlighted that the state cannot give any indication that could affect collateral factors related to the prospects for the acquisition. “For example; there is a clause, the RUFO* clause, that could generate consequences for the state if it intervenes directly or indirectly due to the alter ego principle,” he said.

*Editor’s note: RUFO stands for rights upon future offers, which means that if Argentina offers a better contract to some bondholders before Dec. 31, 2014, it must extend the same offer to other bondholders.