Argentina’s Macri Signs Deal with Vulture Predators

The government of Argentine neo-liberal Mauricio Macri has signed an Agreement in Principle by which it will pay $4.65 bn. in cash to four vulture funds which have litigated against it for years: Elliott Management, owned by rapacious multibillionaire Paul Singer; Aurelius Capital Management; Davidson Kempner; and Bracebridge Capital. The amount offered represents 75% of the judgments the vultures had won in U.S. courts ($5.9 bn.), including principal and interest as well as legal fees. Another $235 mn. will go for claims outside the jurisdiction of the Southern District of New York, Bloomberg Business reported today. But recall that the vultures bought this debt at about 30% of face value when the county was in default — i.e., they are making off with over 200% profit through the destruction of the Argentine economy.

So, the vultures which former President Cristina Fernandez had accurately labelled “economic terrorists,” and whose blackmail and financial warfare failed to break her, got their deal with Wall Street’s man Macri. The vultures came away with a 25% haircut, far more generous that the 65% one that bondholders who participated in the 2005 and 2010 debt restructuring accepted.

In a statement released Monday, Special Master Daniel Pollack cautioned that the deal is not yet completed, and that another six weeks of negotiations will be needed to settle some unresolved issues. But he lavished praise on both Paul Singer, who has waged vicious warfare against Argentina for 15 years, and on Macri, whose “course correction,” he said, “was nothing short of heroic.”

Heroic? If completed, the deal will allow Macri to issue debt and borrow on international markets—he’s already received $5 bn. from a consortium of Wall Street banks—greatly increasing foreign debt which the previous government had significantly reduced, while assaulting living standards and jobs on behalf of foreign banks and multinationals. Whether Macri can implement his plans is contingent on Argentina’s Congress overturning two laws (the Lock Law and Sovereign Payment law) which prohbit settlements of the kind he just signed; payment to the vultures must also be made by April 14, or the deal is off. Congressional approval isn’t guaranteed, as legislators from the Kirchnerite Victory Front (FpV), and its allies, are expected to put up a tough fight.