Archive for the ‘ARGENTINE UPDATE’ Category

La Cámpora ¿obliga a militar con capucha?

25 marzo, 2016

http://www.perfil.com/politica/El-hijo-de-Firmenich-En-La-Campora-me-obligaron-a-militar-con-capucha-20160323-0064.html

ARGENTINE UPDATE – Mar 21, 2016

21 marzo, 2016

Indonesia rights body urges Obama to open secret US files

https://www.washingtonpost.com/politics/indonesia-rights-body-urges-obama-to-open-secret-us-files/2016/03/11/63e6d51c-e768-11e5-a9ce-681055c7a05f_story.html


Monday, March 21, 2016
Church endorses dictatorship trials

Synod backs quest for ‘truth and justice’ in landmark move

In a message of great political significance, just days before the 40th anniversary of the last military coup, the Catholic Church yesterday called for trials prosecuting human rights abuses committed during the 1976-1983 dictatorship to continue in the courts.

“The return of democracy was the beginning of a path of truth, justice and meeting for all (Argentines), a path we need to continue to take in order to reach (a state of) social harmony and friendship,” bishops grouped under the Argentine Synod (CEA) said in a statement yesterday.

It was the first time Church leaders had used the “truth and justice” slogan coined long ago by human rights organizations in a public statement, which came just 24 hours after the Church announced it would open up its archives related to those dark years.

The 246-word statement was issued days after a plenary meeting of the Permanent Commission of the CEA, where bishops had discussed the forthcoming anniversary of the military coup d’état, which took place on 24 March, 1976.

“Argentines cannot stop asking ourselves how we ended up with the darkest chapter of the country’s history. The consequences of infighting, pain and death are still felt today and emerge as a past that we need to deal with and heal,” the Church said.

“We should never allow such an event to happen ever again and we should not forget,” the statement added in decisive language.

Just a day earlier, the Vatican announced it will be declassifying files requested by human rights organizations, in order to find out what happened to those detained and disappeared during the military dictatorship. That news followed US President Barack Obama’s historic announcement that he intends to open up previously withheld US military and intelligence files.

A clearer stance

Church leaders had hinted that their position on the coup would be made public, days after 22 bishops met at the CEA’s headquarters in downtown Buenos Aires on March 14-15 to discuss the issue.

But the “fine print” of the statement remained a mystery, with the conservative La Nación daily suggesting a few days ago that the Church’s letter would call on Argentines to heal past wounds.

Somewhat surprisingly, the statement released yesterday lunchtime openly condemned “state terrorism” (which the Church said led to “torture, murder and the … kidnapping of children”) and contained no visible traces of the so-called “Two-Demons theory” that equated the victims of attacks by left-wing armed groups with the victims of state terrorism.

Church leaders said yesterday the country’s wounds will only be healed “through a path of truth, repentance and justice” — a nod at human rights trials that were restarted under the administration of former president Néstor Kirchner.

Last year, human rights groups publicly voiced their concerns about the Catholic Church’s stance of supporting trials against repressors, after Bishop Emeritus of San Isidro Jorge Casaretto said during a discussion panel that “reconciliation” had to be a political goal in the near future.

Back then, head of the Argentine Synod, José María Arancedo, told rights leaders that the Church did not endorse the suspension of proceedings — a stance that was underlined firmly in yesterday’s statement.
The Vatican meanwhile announced that Pope Francis will meet with relatives of the disappeared after his regular Wednesday audience in St Peter’s Square this week.

Sources from the Holy See said Francis would host Genevieve Jeanningros, nephew of French nun Leonie Duquet, who disappeared in Buenos Aires in 1976, Marie-Noelle Erize Tisseau, the sister of Marie-Anne, disappeared in San Juan that same year and Víctor Caravajal, the brother of communist leader Alberto Caravajal, who was murdered in August, 1977.

The role of priests

On Saturday, the secretary-general of the CEA, Carlos Malfa, said that the Church’s archives related to dictatorship-era “will be declassified,” an announcement hailed by human rights leaders.

Malfa said sorting through the files could take some time, but stressed clear progress was being made with the powers that be at the Vatican.

As the Herald reported last week, rights groups want the Church to hand over internal files or individual records from priests and nuns, who may have been in touch with prisoners.

The Attorney General’s Unit for Cases of Child Appropriation has also requested that the Church hand over baptism certificates as investigators believe that those who stole babies sometimes took on roles as godparents.

According to the Centre for Legal and Social Studies (CELS), nine priests currently face charges for having committed crimes against humanity. But probes have stalled — since the reopening of dictatorship-era trials in 2006, only two priests have been convicted.

The founder of CELS, the late Emilio Mignone, once accused Jorge Bergoglio — now better known as Pope Francis — of being linked to the kidnapping of two priests, Orlando Yorio and Francisco Jalics, during the dictatorship.

“The possible cooperation of Bergoglio and other leaders of the Catholic Church might never be cleared before the courts. The election of Bergoglio as pope in 2013 placed a heavy tombstone on these investigations,” the CELS wrote in 2015.

The allegations have never been confirmed.

Buenos Aires Herald staff

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MONDAY CLIPS
1. ARGENTINA STILL GRIPPED BY DEATH OF PROSECUTOR PROBING TERRORISM CASE (The Washington Post)

2. ARGENTINA’S NEW PRESIDENT ON REBUILDING HIS COUNTRY, AND QUICKLY (60 Minutes)

3. ARGENTINE CHURCH SAYS WORKING TO RELEASE DIRTY-WAR ARCHIVES (Associated Press)

4. ARGENTINA, CREDITORS AGREE TO $155 MILLION MORE IN DEFAULT SETTLEMENT: MEDIATOR (Reuters News)

5. AS OBAMA HEADS TO ARGENTINA, NEW BOOK EXPLORES COUNTRY’S ‘DIRTY WAR’ (CNN Wire)

6. WHY U.S. SHOULD WELCOME ARGENTINA, CUBA TRIPS (CNN Wire)

7. ARGENTINE SENATE DEBT DEAL IS LIKELY, BUT AT A COST (Oxford Analytica)

8. REVENUE-SHARING RETURNS TO ARGENTINE POLITICAL AGENDA (Oxford Analytica)

1. ARGENTINA STILL GRIPPED BY DEATH OF PROSECUTOR PROBING TERRORISM CASE (The Washington Post)
By Nick Miroff
20 March 2016

BUENOS AIRES – The fictional world of the late Argentine writer Jorge Luis Borges was a place of bookshelves that stretched to infinity, dreams within dreams and detective stories that led in circles.

Argentina for the past 14 months has been lost in a real-life labyrinth worthy of a Borges fable – ever since prosecutor Alberto Nisman was discovered dead in a pool of blood on his bathroom floor.

The body of Nisman, 51, was found the day before the prosecutor was expected to publicly accuse then-President Cristina Fernández de Kirchner of making a secret pact with Iran to gloss over Tehran’s possible role in the 1994 bombing of a Jewish community center in Buenos Aires. It was South America’s worst terrorist attack.

Investigators initially ruled Nisman’s death a suicide. Argentines took to the streets in protest.

As President Obama arrives in Buenos Aires on Tuesday for the first state visit by a U.S. president in 19 years, the unsolved mystery of Nisman’s death continues to hang over the country, casting a shadow far beyond Argentina’s borders.

“Everyone knows it was a homicide,” said Jorge Asís, a columnist and retired diplomat, “but no one can prove it.”

Nisman’s family and supporters have been pressing for a formal homicide investigation, and on Friday a federal tribunal in Buenos Aires heard new arguments seeking to elevate the case to a high-level homicide probe. The three-judge panel could accept those arguments or leave the case with lower courts, upholding the version of events that points to a suicide. A ruling is expected in the coming days.

The judge previously overseeing the case referred it to Argentina’s highest court after Antonio Stiuso, the country’s shadowy former intelligence chief, made a dramatic return from self-imposed exile in the United States last month and testified that Nisman had been killed by a “group of people” with ties to former president Fernández de Kirchner. Stiuso, who worked closely with Nisman, offered no evidence for the claim, according to attorneys who have seen his sealed testimony.

New Argentine President Mauricio Macri, a centrist whose election in November ended 12 years of governance by Fernández de Kirchner and her late husband, Néstor Kirchner, has promised Argentines a thorough, impartial investigation to clear up once and for all how and why Nisman died. But the circumstances of the death are so murky that few here think the country will ever know what happened.

Nisman had spent more than a decade investigating the 1994 bomb attack that killed 85 people at the Argentine-Israeli community center known by the acronym AMIA.

Argentina initially blamed Hezbollah agents and Iran for the attack, and in 2004 Nisman was assigned to the case by then-President Néstor Kirchner, who said the previous investigation had been botched. Interpol Red Notice arrest warrants were issued for several top Iranian officials, essentially barring them from leaving their country, and Kirchner denounced Tehran at the United Nations and other international forums.

In 2007, Kirchner was succeeded by his wife, Cristina, just as relations with Iran were beginning to improve. She drew Argentina close to then-President Hugo Chavez’s Venezuela, which had friendly ties with Iran. Another close ally of Iran’s, Syrian ruler Bashar al-Assad, visited Buenos Aires for talks with the president in 2010.

It was then that Kirchner agreed to reset relations with Iran, a major market for Argentine grain. Nisman later alleged that her government had begun maneuvering to have the Interpol warrants lifted as part of an agreement she signed with Tehran in 2013 to form a “truth commission” to investigate the bombing.

Nisman objected to the accord, and his relationship with Fernández de Kirchner frayed.

On Jan. 19, 2015, Nisman was preparing to go before Argentina’s Congress to denounce Fernández de Kirchner in a report accusing her government of colluding with Iran to bury the investigation into the bombing.

According to the official version of events, Nisman that weekend dismissed the government security team assigned to protect him, then summoned his aide Diego Lagomarsino and asked to borrow a gun. Lagomarsino said he returned with the weapon to Nisman’s apartment in an upscale Buenos Aires district, then left.

Nisman subsequently died from a bullet to the head that had been fired from Lagomarsino’s .22-caliber Bersa pistol.

There was no sign of forced entry. No suicide note. Investigators swarmed the apartment, contaminating the crime scene, according to Nisman family attorneys. Nisman’s computer and cellphone appeared to have been altered.

Fernández de Kirchner initially called the death a suicide, then backed away from the claim. A month later, 400,000 protesters marched in silence through the rainy streets of Buenos Aires.

It was not until last month that a government prosecutor, Ricardo Sà¡enz, made the first official recommendation that Nisman’s death be investigated as a homicide.

The critical piece of evidence for Sáenz: Nisman had no gunshot residue on either hand. In addition, he had displayed no signs of depression. On the contrary, friends and relatives say, he had seemed eager and determined to deliver his report to Congress.

“As far as I’m concerned, he was murdered,” Sáenz said in an interview.

Sà¡enz, who has clashed publicly with Fernández de Kirchner in the past, said: “I won’t rule out that the former president will be called to testify.”

“She said it was a suicide, then later it was a homicide, so she should be asked what information she had,” he said. “I think she should be called to clarify what she knows.”

Supporters of Fernández de Kirchner accept that Nisman might have been murdered, but they suggest his killing could have been part of a scheme to frame Fernández de Kirchner.

Suspicion also falls on Lagomarsino, the aide hired by Nisman to help with his computer needs and whose fingerprints were strangely absent from the gun he said he lent to Nisman. Lagomarsino was the last person known to have seen the prosecutor alive, and his attorneys have fought the Nisman family’s attempt to elevate the case to a federal murder investigation.

In a bizarre twist, Lagomarsino is under investigation in a separate probe along with Nisman’s mother and sister, whose names appear on a U.S. bank account of Nisman’s that contains more than $666,000. Nisman failed to report the account, which is illegal for a prosecutor, and investigators say he also used his mother’s name to hide his ownership of three investment properties in Uruguay.

Stashing money and investments outside Argentina is nothing exceptional for someone with Nisman’s profile, prosecutors say. But tracing the payments in those accounts may be one of few ways to map out Nisman’s web of relationships and obtain new clues as to who might have wanted him dead.

2. ARGENTINA’S NEW PRESIDENT ON REBUILDING HIS COUNTRY, AND QUICKLY (60 Minutes)
By Lesley Stahl
Mar 20, 2016

The following script is from “Presidente Macri” which aired on March 20, 2016. Lesley Stahl is the correspondent. Shari Finkelstein and Nieves Zuberbühler, producers.

In a matter of months, Argentine President Mauricio Macri has made a U-turn in his country’s foreign policy, seeking closer ties with the West

There’s a lot in the news about a wealthy businessman-turned-presidential candidate with a five-letter last name. But the one we’re going to tell you about tonight already won his election and his last name isn’t Trump; it’s Macri.

He is the new president of Argentina, a surprise, come-from-behind victor who has the eyes of the region and the world on him as he tries to pull his country — the second largest in Latin America — out of a morass of debt, inflation, and international isolation. This week, President Obama will be the first U.S. president in more than a decade to visit Argentina, a sign that the U.S. government has high hopes for Mauricio Macri and his promises to turn his country around.

We met Mauricio Macri just two months into his presidency in Argentina’s version of the White House, a pink house, called the Casa Rosada. He took over a country that had been ruled for eight years by a left-wing populist named Cristina Kirchner who allied Argentina with anti-American regimes like Iran, Venezuela and Cuba.

Lesley Stahl: Here Argentina has been in this almost a bloc that takes in almost all of South America.

Mauricio Macri: That was–

Lesley Stahl: Left-leaning.

Mauricio Macri: Not anymore. That was, and not anymore.

Not anymore because he made a U-turn in his country’s foreign policy. In a flash, Argentina has become pro-American. Macri and Vice President Biden were all smiles at the World Economic Forum in Davos, Switzerland, in January, where Macri went seeking closer ties with the West and foreign investment. He brought one of the men he defeated in the election with him, which impressed the vice president.

Biden: I want the American press to observe something. The new president brought along the leader of the opposition with him. That’s what we got to do at home.

Mauricio Macri: I really believe in 21st century demands that we have to be open, and not putting any more ideological differences in front of the best solutions.

He’s a pragmatist. Trained as an engineer, Macri started off an outsider in Argentine politics. He is the son of one of the wealthiest men in the country, and worked at first in the family real estate and construction business, once making a deal with that other scion of a real estate empire.

Lesley Stahl: I heard that you actually have a relationship with Donald Trump.

Mauricio Macri: It’s a long story, long away.

It was more than 30 years ago. Macri told us his father had invested in a real estate venture in New York City but ran into problems and asked him to arrange a sale to Donald Trump.

Mauricio Macri: It was a very unique moment for me because I was only 24 years old.

Lesley Stahl: You negotiated with the guy who says he’s the best negotiator in the world?

Mauricio Macri: He thinks that, yeah. I don’t– I’m not so sure. I’m not so sure.

Lesley Stahl: Did he win?

Mauricio Macri: We were in a very weak position. Because the– he was local. Having the support of all the banks. But I could say that we tied.

Now, at 57, he’s happily married to fashion designer Juliana Awada. Watching them play with their four-year-old daughter Antonia, you can’t help but think of the Kennedys and Camelot — and the comparison has been made in Argentina.

When Macri ran for president, no one thought he would win, partly because of his image as a wealthy businessman unable to connect with the people. But that image was softened by campaigning with his wife and young daughter at his side and by their openness about their relationship.

Juliana Awada: I never imagined I was going to end– with him. And when I have the opportunity to met him, I fall completely in love.

That was seven years ago. He’d already been married twice and had older children — as did she.

Mauricio Macri: I call my best friend. I told him, “I’m going to marry again.” “No, come on, you can’t do it. You have just finish a relation two months ago.” “No, this is the lady of my life. I want to be with her for the rest of my life, and I’m sure that this is the correct decision.”

At their wedding the following year, Macri revealed a hidden talent.

Mauricio Macri: I’m a great singer.

Juliana Awada: Ah.

Lesley Stahl: You’re a great singer?

He set out to prove it at their wedding party. He dressed up as his favorite rock star, Freddie Mercury of the band Queen — complete with a fake mustache, and started serenading Juliana. It almost killed him.

Mauricio Macri: And in the moment I was breathing to sing the up part of “Somebody to Love,” I swallow my moustache.

Lesley Stahl: You swallowed the moustache–

He started choking on the Freddie Mercury moustache.

Mauricio Macri: It end up here. It didn’t go– it didn’t go down. So, I spend like–

Juliana Awada: Twenty minutes.

Mauricio Macri: Twenty minutes.

Juliana Awada: Half an hour.

Mauricio Macri: Thinking that I was going to die. I couldn’t breathe. Now is funny, but it was a horrible moment, yeah.

Lesley Stahl: You’ve had a couple of brushes with death, actually.

Mauricio Macri: No, no. This was quite funny. The other one wasn’t so funny.

Lesley Stahl: No.

The other one happened when he was 32. He was grabbed off the street – and kidnapped.

Lesley Stahl: Is it true when they kidnapped you, they put you in a coffin?

Mauricio Macri: Yes. To take me to the place. And then in another little bit bigger coffin. It was a box.

He was held for 14 days.

Lesley Stahl: Did you think you’d never live through that?

Mauricio Macri: You keep thinking all the– all day because you are trapped there with nothing to do, so you think I’m going to die, I’m not going to die because in many cases that group of kidnappers killed the victims.

But he was released, after his father paid a $6 million ransom. The incident changed the trajectory of Macri’s life, dramatically. It persuaded him to leave his father’s business and set out on his own. First he became president of one of Argentina’s most popular soccer teams, Boca Juniors. He then tried his hand at politics. He created his own third party and eventually ran for mayor of Buenos Aires. On his second attempt, he won. That’s when a whole new Macri emerged.

Dancing has become a Macri trademark.

Lesley Stahl: You’re known for this.

Mauricio Macri: You know, dancing is like it’s another way of communicating, no?

Lesley Stahl: You know, I’ve heard it said, no offense, dad dancing.

Mauricio Macri: Dad dancing?

Lesley Stahl: Older man dancing–

Mauricio Macri: No, no, no, no.

Lesley Stahl: I’ve heard that.

Mauricio Macri: No, no. You have to watch it. You have to watch my performance. Because is advanced dancing. There are so innovating steps. I dream them. First I dream them and then I perform them.

Macri got to live out two dreams in December when he danced on the balcony of the presidential palace at his inauguration — after a close, hard-fought election that left the country bitterly divided. Even the transition was contentious. Breaking tradition, the outgoing president Cristina Kirchner refused to attend the swearing in.

Kirchner had been a charismatic leader, in the style of the popular Eva Peron, who shared the spotlight with her husband, President Juan Peron, in the 1940s, and whose legend went all the way to Broadway.

“Don’t cry for me Argentina”

The Peronist Party has dominated Argentine politics on and off for the last 70 years. Kirchner was a Peronist, whose populist economic policies: generous subsidies on things like electricity, high taxes on agricultural exports, burdensome regulations, a bloated bureaucracy, and currency controls, all in combination, crippled the Argentine economy.

Alfonso Prat-Gay: She left an economy that’s not been growing for four years now, a stagnant economy.

Alfonso Prat-Gay is President Macri’s minister of finance.

Alfonso Prat-Gay: High inflation. Eight years in a row of more than 25 percent inflation. A significant fiscal deficit. The Central Bank was running out of reserves.

Lesley Stahl: This is what you walked into.

Alfonso Prat-Gay: Absolutely.

And making matters worse, the Government Bureau of Statistics, called INDEC, had been minimizing the problems.

Alfonso Prat-Gay: The National Statistics Institute was an institute that was basically lying to us and to the rest of the world.

Mauricio Macri: They were issuing wrong numbers.

Lesley Stahl: Fake numbers?

Mauricio Macri: Fake–

Lesley Stahl: Phony numbers, just made up statistics?

Mauricio Macri: Exactly. What the president wanted.

Lesley Stahl: And it wasn’t real–

Mauricio Macri: And that’s not the way. That’s not the way.

Lesley Stahl: No.

Mauricio Macri: If you have a problem, you have to recognize it, and solve it.

That’s my commitment, no?

Lesley Stahl: So do you even know what the inflation rate is? Do you even know what the budget deficit is?

Mauricio Macri: We are building up the real numbers.

Even without those precise numbers, he and his team plunged into action, undoing Kirchner’s legacy. What has heads spinning here is the speed with which they have changed course 180 degrees in just a matter of weeks.

Lesley Stahl: You have cut export taxes dramatically, you’ve let your currency float, you’ve cut electrical subsidies.

Mauricio Macri: Yes

Lesley Stahl: Fired thousands of government workers. You have done so many dramatic, big things.

Mauricio Macri: Well, but we need it. We need it because we need to put our country back to growth. We were trapped with so many rules, that we couldn’t move.

But he raised eyebrows, by making the changes while the Peronist-dominated Congress was in their summer recess.

Lesley Stahl: Most if not all of the things you’ve done, dramatic, big, you did by presidential decree. Congress is on recess. You didn’t negotiate with them. You didn’t consult with them.

Mauricio Macri: I’m using the constitution. I will always respect my constitution, it’s a very good one.

Lesley Stahl: But you criticized Cristina Kirchner for doing that. You said she didn’t go through the democratic process.

Mauricio Macri: Lesley, I only criticized her when she did it going over the constitution.

Lesley Stahl: You say that, but you’ve been highly criticized, just making all these decrees.

Mauricio Macri: Well, you know– at a certain level always the opposition has to criticize something. Let them.

Macri has worked hard at winning over as many in the opposition as possible. He met early on with the two men he ran against as well as all the nation’s governors, and since Congress has come back, he’s shown his political skill by convincing a whole bloc of Peronist legislators to work with him.

Mauricio Macri: I have received all of them, and say, “Well, I’m ready to work. Do you agree that we need to work towards zero poverty? We have to defeat drug trafficking. We have to improve the quality of our democracy.” Well, yes. Well, let’s find in which specific projects we can do it. And we found– we found, and we are finding that there are ways in which we can cooperate, even though in two years we are going to compete again in an election process. But in the meantime we will show our citizens that what they are demanding, is going on. That we work together.

What a concept — two sides looking for compromise. The public seems to like it — Macri’s approval ratings are over 60 percent, but it’s early. Trade unions are threatening strikes, and the only other non-Peronist presidents in over 30 years were both forced out of office before the end of their first terms.

Lesley Stahl: What’s the pressure like on you at this moment? You’re doing so much so quickly.

Mauricio Macri: That we have to do more. That’s the pressure. We are in a very bad starting point, but let me tell you, I’m here running the country because I believe in my people. I have the luck to choose what to do in my life. And I have chosen this because I believe that everybody can do much better than what they are doing now. So I’m trying to do my best. Trying to do my best.

After we interviewed him, another big development. President Macri has settled a multibillion dollar battle with New York hedge funds that will allow Argentina, after 15 years, to once again raise financing overseas and help attract foreign investment.

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3. ARGENTINE CHURCH SAYS WORKING TO RELEASE DIRTY-WAR ARCHIVES (Associated Press)
Saturday, March 19, 2016

A representative for Argentina’s Catholic bishops says church authorities are working to declassify their archives from the time of the country’s 1976-83 military dictatorship.

Episcopal Conference Secretary-General Carlos Malfa tells the official Telam news agency that the date of the release isn’t set.

Many senior clerics were close to the rulers at the time while some radical priests were persecuted and killed by them. Pope Francis was then head of the country’s Jesuits. He’s been criticized for not speaking out publicly, but credited with saving the lives of some victims.

Three people who were disappeared by the regime are scheduled to meet Francis on Wednesday, a day before the 40th anniversary of the military coup.

The U.S. also announced plans to declassify documents. President Barack Obama visits Argentina this week.

4. ARGENTINA, CREDITORS AGREE TO $155 MILLION MORE IN DEFAULT SETTLEMENT: MEDIATOR (Reuters News)
19 March 2016

(Reuters) – Argentina settled with an additional 115 individual creditors holding defaulted sovereign bonds for $155 million, Daniel Pollack, the court-appointed mediator in the long-running case, said on Friday.

Pollack’s announcement brings the total amount of settlements agreed in principle with U.S. creditors for more than the original $6.5 billion pot of money committed to end the dispute. The most recent settlement also moves Latin America’s No. 3 economy closer to ending a festering 14-year legal battle over its historic default.

“The parties anticipate that most of these bondholders, all of whom have both money judgments and injunctions, will opt to receive 70 percent of their claims rather than 150 percent of the principal of their bonds, both of which are options available to them,” under the terms offered by the government on Feb. 5, Pollack said.

Since the election of President Mauricio Macri in November, Argentina has moved swiftly to settle the debt dispute, mainly with U.S.-based hedge funds that sued in federal court for full payment on sovereign bonds defaulted upon in early 2002.

On Feb. 2, it reached a $1.35 billion agreement to settle with a group of Italian investors who held defaulted bonds.

On Feb. 5, it committed to spending $6.5 billion in order to settle more than $9 billion worth of claims in the U.S. courts before U.S. District Judge Thomas Griesa. So far it has agreements from more than 85 percent of remaining holdouts.

It reached agreement in principle with four major U.S. holdout creditors on Feb. 29 for $4.65 billion. They have until April 14 to deliver the cash.

“As with all such settlements, these are subject to the lifting of the Lock Law and the Sovereign Payment Law by the Argentine Congress and the lifting of the Injunctions by Judge (Thomas) Griesa,” Pollack said.

Griesa’s 2012 ruling barred Argentina from paying creditors who settled previously in 2005 and 2010 for less than 30 cents on the dollar without also making a court-awarded payment to the holdout creditors.

The injunctions were removed by Griesa on March 2. The issue is now being heard before the U.S. 2nd Circuit Court of Appeals.

“This group of 115 individual bondholders had appealed the vacating of the Injunctions by Judge Griesa, but have now withdrawn their appeals with prejudice,” Pollack said.

On March 16, Argentina’s lower house of Congress supported Macri’s legislative efforts, voting 165 to 86 in favor of removing those legal impediments.

The dispute shut Argentina shut out of the international capital markets.

Legislators loyal to former leftist president Cristina Fernandez, a Peronist who refused to negotiate with the bondholders, argued Macri was selling out to Wall Street investors by offering repayment terms of 70-75 cents on the dollar.

Argentina plans to sell three bonds for a total of $11.68 billion in mid-April in order to pay the creditors in cash.

5. AS OBAMA HEADS TO ARGENTINA, NEW BOOK EXPLORES COUNTRY’S ‘DIRTY WAR’ (CNN Wire)
By Daniel Burke CNN Religion Editor
18 March 2016

(CNN) — President Barack Obama plans to visit Argentina, the homeland of Pope Francis, next week in his first presidential trip to the Latin American nation.

Obama’s visit will coincide with the 40th anniversary of Argentina’s military coup, which began a period of political strife and violent government oppression known as the “Dirty War.” Alongside the Argentine people, Obama is expected to honor the war’s many victims on March 24.

The Rev. Gustavo Morello is a sociologist and Jesuit priest who spent years digging into the Catholic Church’s role in the Dirty War. When the junta seized power in 1976, it began a systematic campaign to wipe out suspected dissidents, and thousands of people were kidnapped and “disappeared.”

Morello’s book, “The Catholic Church and Argentina’s Dirty War,” examines the context of the disappearances. In particular, he investigated the kidnapping of five seminarians and an American priest in 1976.

Morello spoke with CNN about what made him want to explore this dark chapter in his native Argentina’s history, and whether his research tells us anything about the country’s most famous Catholic, Pope Francis.

Q: What is your book about?

It’s about an American priest and five South American Catholic seminarians, all of them of the Congregation of Our Lady of La Salette, who were kidnapped in Argentina in 1976. That case is like a tree; from it I went to explore the forest.

I explored the increasing political violence in my country at the time, the dictatorship, the “disappeared,” and the struggles of those who were trying to save them.

The story of the kidnapping is very amazing, almost movie-like. The seminarians left the house in the afternoon to attend classes, but agreed to come back immediately after because Sister Joan McCarthy, an American nun, was visiting them. They planned to have dinner together.

While the Rev. James Weeks was taking a nap and Joan was knitting in front of the fireplace, a mob from Cordoba police department broke into the house. A long nightmare began that evening, a nightmare that to some extent is ending now, as the people responsible for the kidnapping are in finally in court for human rights violations.

The priests were “disappeared” for a couple of days, but since Weeks was American and his family knew Ted Kennedy and the Rev. Bob Drinan, a Massachusetts congressman at the time, State Department got involved. Weeks was expelled from the country after a week and started a campaign to release the South American seminarians.

While Weeks and McCarthy were demonstrating in front of the Argentinean Embassy in D.C., the seminarians were sent to a concentration camp and tortured, by other fellow Catholics. The discussion at the torture chamber was about what “true” Catholicism was. It was bizarre.

Q: Sounds bizarre indeed. Of all the kidnappings that occurred during the Dirty War, what made you want to investigate this one?

I was interested in the relations of religion and violence. I have done research about the Montoneros, a guerrilla army in Argentina’s 1970s, and the links of that organization with the Catholic faith.

I wanted to know about the Catholic Church and its behavior during the dictatorship. It is still a very discussed issue in my country. And I was intrigued by the fact that many good, honest people did nothing when the government was kidnapping and killing innocent people. Why didn’t any alarm sound? Why weren’t there, from the religious leaders, any red lights? Was it just complicity, agreement with the government?

Q: How complicit was the Catholic Church in the Dirty War?

Religious people don’t live in a vacuum, but in interaction with politicians, students, workers, military. I wanted to place Catholics in that context. I realized that state terrorism, and the persecution against certain types of Catholics, started before the military dictatorship, under a democratic government.

When I was attending a conference, I actually found one of the seminarians and we started to talk. My conversation with Alejandro Dausá snowballed to other people, and I realized that I wanted to focus on the people, the regular guys, and not in the church’s official documents, though I used them a lot.

I discovered that Catholic people reacted in different ways facing violence. Some viewed secularization as a threat to the world they loved, and therefore supported state terrorism. There were others who saw in the transformation an opportunity to craft the world in the way they wished, and they were mostly the victims of state terrorism.

And there was a third group, who acknowledged the transformations brought about by modernity, but were afraid of social violence, and wanted to preserve a good relation with the authorities.

Q: Whatever happened to the seminarians?

The Rev. Weeks and Sister Joan passed away last year. James was living in in a nursing home in Connecticut. Joan was in La Rioja, northwestern Argentina, helping a rural community there.

I was able to find three of the seminarians. One of them is a priest in Argentina, another was ordained as a priest but left the ministry and helps communities in Bolivia, and another one left the congregation, got married and had children.

The case was brought to court, and is under trial now, after almost 40 years. Last May when I visited my family in Argentina, I was called as a “contextual witness,” so I went to court and gave my declaration. I talked about the research I’ve done, so it was a good way to make use of my studies. My work is not just for other colleagues, but it also may help other people to understand what happened and also to get justice.

Q: A lot of people will want to know if your research tells us anything new about Pope Francis, who was the Jesuit leader (superior) in Argentina during the Dirty War.

The book is not about the Pope, but two months before the La Salette seminarians were kidnapped in Cordoba, two Jesuits were kidnapped in Buenos Aires.

In those years the pope, then known as the Rev. Jorge Bergoglio, was the superior of Argentine Jesuits. I didn’t focus my research the Jesuits, but since I explore the historical and political situation of Argentina and the Catholics in those years, I think my book provides a good understanding of what was going on. I explore the context where the pope comes from, and I do think that context matters when we try to understand a person.

I show the complexity of the historical situation and the different forces any religious superior had to navigate to be faithful to the people and at the same time protect their priests, a situation where people were hurt and now need to be healed, even 40 years later.

6. WHY U.S. SHOULD WELCOME ARGENTINA, CUBA TRIPS (CNN Wire)
By Susan Segal
18 March 2016

(CNN) — President Barack Obama’s visit to Cuba and Argentina next week will be rich in both substance and symbolism.

Early in his first term, President Obama said he was determined to open a new chapter of engagement between Latin America and the United States, one based on mutual respect and shared values. By abandoning the policies that for decades were the hallmark of U.S.-Latin America relations, the Obama administration has therefore succeeded in building stronger and more productive ties between the United States and its southern neighbors.

This is the right approach for a region that, despite some notable exceptions, has over the past 30 years overwhelmingly embraced democratic institutions, held regularly scheduled elections, and, more often than not, respected political alternation.

Of course, Latin America was hardly at the top of President Obama’s foreign policy priorities when he came to office, given challenges facing the global economy and the growth of extremism across the Islamic world, among other issues requiring his immediate attention. Still, the administration can chalk up a list of important achievements across the region, from the historic opening of relations with Cuba, to trade agreements with Colombia and Panama, to continued security support for Colombia, which contributed to a major peace breakthrough with left-wing guerrillas.

Meanwhile, despite the current inflammatory political rhetoric, commercial ties between the United States and Mexico are at an all-time high, with trade between the two countries reaching $1.46 billion per day.

The region has also benefited from Obama’s critically important decision to designate Vice President Joe Biden as his point person on Latin America. Using both his natural charm and his deep knowledge of a region he has visited 14 times over the past seven years, Biden has successfully bridged a gap in relations with Brazil and persuaded the U.S. Congress to approve crucial aid for Central America.

True, it has not all been a succession of victories and achievements. U.S. relations with several Latin American governments remain testy, and the administration has maintained a war of words with Venezuela over the need for greater democratic pluralism in that country. However, President Obama has understood that the region is not a monolithic block, that in every country democratic institutions will evolve at their own pace, and that the role of the United States is to support and encourage rather than dictate and interfere.

This is underscored most clearly in the fact that Barack Obama will be the first sitting U.S. president to visit Cuba in almost 90 years. His policy toward the island is, without a doubt, his boldest hemispheric initiative, as it chips away at a more than half-century-old embargo policy that has hurt ordinary Cubans, put U.S. commercial interests at a disadvantage compared to those of other countries, and poisoned the U.S. relationship with the rest of the continent.

Critics of the rapprochement cite Cuba’s human rights record, and they are right to do so — it is a topic of considerable concern. But we are in a better position to have a real impact if the United States establishes a more fluid rapport with Havana. The truth is that the embargo has ultimately failed to persuade the Cuban authorities to allow a more open and democratic society. It is time to try a different approach.

President Obama’s decision to visit Argentina just over 100 days into President Mauricio Macri’s term, meanwhile, is also very significant. The trip, which is the first visit by a U.S. president since 2005, clearly recognizes the newly elected President’s determination to reinsert Argentina into the global economy, as well as his willingness to build a mutually beneficial relationship with the United States. In Buenos Aires, there will be an opportunity for both leaders to engage in a substantive dialogue about the future of the region, as well as expand on an extensive bilateral agenda that includes trade, investment, education, renewable energy and climate change, citizen security, and drug policy. Most importantly, the trip recognizes Argentina’s new direction under President Macri’s leadership and the unique opportunity it represents for both the people of Argentina and the hemisphere.

With just over nine months before he hands the reins over to a successor, President Obama continues to implement his strong vision for the region, anchored in building new relationships and renewing old ones as well as creating partnerships across countries linked not just by geography but by shared history, interests, and values. This is the right path for increased and long-lasting prosperity for all.

Governors will leverage their congressional influence to gain significant concessions, probably including a new revenue-sharing regime, given the urgency of the issue. However, they are aware that Macri will have little to offer them if the deal fails, making eventual passage likely.

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ARGENTINE UPDATE – Mar 17 & 18, 2016

19 marzo, 2016

– America’s Role in Argentina’s Dirty War
By THE EDITORIAL BOARDMARCH 17, 2016

A few months after a military junta overthrew President Isabel Perón of Argentina in 1976, the country’s new foreign minister, Adm. Cesar Guzzetti, told Henry Kissinger, America’s secretary of state, that the military was aggressively cracking down on “the terrorists.”

Mr. Kissinger responded, “If there are things that have to be done, you should do them quickly,” an apparent warning that a new American Congress might cut off aid if it thought the Argentine government was engaging in systemic human rights abuses.

The American ambassador in Buenos Aires soon reported to Washington that the Argentine government had interpreted Mr. Kissinger’s words as a “green light” to continue its brutal tactics against leftist guerrillas, political dissidents and suspected socialists.

Just how much the American government knew about Argentina’s repressive “Dirty War,” which lasted from 1976 to 1983 — and the extent to which it condoned the abuses — has remained shrouded in secrecy.

When President Obama visits Argentina next week during the 40th anniversary of the coup, he should make a pledge that Washington will more fully reveal its role in a dark chapter of Argentine history. Military officials abducted thousands of civilians during this period. Hundreds of babies, stolen from Argentines who were arbitrarily detained, were raised by military families.

Human rights groups in Argentina have long sought access to classified American intelligence and diplomatic records, hoping that they will shed new light on the abuses and the fate of missing Argentines. The Argentine government itself has formally asked for declassification. “There is absolutely no doubt that the release of these records on repression in Argentina would reveal substantive information on the years of repression and advance the cause of truth and justice in that country,” said Peter Kornbluh, an analyst at the National Security Archive who specializes in Latin America.

In 2002, Washington partly declassified roughly 4,700 State Department records from the Dirty War period. Those documents have aided judicial proceedings and added to a historical record. But much of that record remains obscured.

Declassifying a more extensive set of documents would also bring into sharper focus a shameful period of American foreign policy, during which Washington condoned and in some instances supported the brutal tactics of right-wing governments in the region. It is time for the American government to do what it still can to help bring the guilty to justice and give the victims’ families some of the answers they seek.

===================================================
THURSDAY

1. AP INTERVIEW: ARGENTINE LEADER SAYS OUTRAGED BY CORRUPTION (The Washington Post)

2. ARGENTINE CONGRESS APPROVES DEAL WITH HOLDOUT CREDITORS (The Washington Post)

3. AMERICA’S ROLE IN ARGENTINA’S DIRTY WAR (The New York Times)

4. NOT SO FAST: ARGENTINA STILL HAS SOME BOND HOLDOUTS (The Wall Street Journal Online)

5. ARGENTINA’S LOWER HOUSE APPROVES DEBT DEAL WITH CREDITORS (The Wall Street Journal Online)

6. CHINA CALLS FOR INVESTIGATION INTO ARGENTINE SINKING OF FISHING VESSEL (The Wall Street Journal Online)

7. ARGENTINA’S LOWER HOUSE PASSES DEBT BILL TO SETTLE WITH HOLDOUTS (Bloomberg News)

8. ARGENTINA’S PUENTE LOOKS TO 2017 IPO IN STEPS FOR GLOBAL REACH (Bloomberg News)

9. EU AND MERCOSUR TO EXCHANGE TRADE OFFERS IN APRIL, ARGENTINA SAYS (Reuters News)

10. ARGENTINA’S LOWER HOUSE CLEARS DEBT SETTLEMENT PACKAGE (Reuters News)

11. ARGENTINA’S YPF APPEALS COURT ORDER TO SHOW CHEVRON PACT DETAILS (Reuters News)

12. ARGENTINA’S YPF TO APPEAL ORDER TO DISCLOSE CHEVRON CONTRACT (Platts Commodity News)

13. CHINA DEMANDS INVESTIGATION AFTER ARGENTINA SINKS FISHING BOAT (UPI)

14. ARGENTINA SINKS CHINESE FISHING BOAT (Foreign Policy)

1. AP INTERVIEW: ARGENTINE LEADER SAYS OUTRAGED BY CORRUPTION (The Washington Post)
By Peter Prengaman and Paul Haven 
March 16, 2016

Argentina’s president said Wednesday he is outraged by corruption that seeped into all facets of society during his predecessor’s administration and believes next week’s visit by Barack Obama will be a new chapter that could lead to billions of dollars in investment.

President Mauricio Macri assumed power in December after campaigning on promises to crack down on graft, open up Latin America’s third­ largest economy and reverse many of the populist policies of his predecessor, Cristina Fernandez. In a wide­ranging interview with The Associated Press, the former Buenos Aires mayor and son of one of the country’s richest businessmen said he was particularly perturbed by rampant corruption at all levels.

“I feel the same as the majority of Argentines: rage, disenchantment and helplessness,” Macri said, reflecting on a video this week that allegedly showed the son of a businessman with close ties to the former president counting what appear to be tightly wrapped stacks of dollars, euros and Argentine pesos at an illegal exchange house. “There will not be a repeat of this kind of embarrassing corruption, these abuses of power.”

Macri cast the two­day visit by the U.S. president as an opportunity to show the world that Argentina is cleaning up its act and hopes to open its doors to billions in investment. The last state visit by an American president was by Bill Clinton in 1997. Such a trip would have been unthinkable under Fernandez, who during her eight years in office aligned herself with socialist leaders in Cuba and Venezuela while often being outwardly antagonistic toward the United States.

Unlike several other Latin American leaders, Macri sidestepped questions about the U.S. election and the controversial candidacy of leading Republican candidate Donald Trump. Macri said he knew both Trump and Democratic front­runner Hillary Clinton personally and would be able to work with either should they reach the White House. Hours before the interview, the lower chamber of Argentina’s Congress approved a negotiated deal on repaying bonds held by a group of creditors in the United States, a step toward ending a long­standing fight that made Argentina a financial pariah and kept it on the margins of international credit markets.

The legal battle had its origins in Argentina’s financial collapse in 2001­2002, when it defaulted on $100 billion in debt. Creditors led by billionaire hedge fund manager Paul Singer refused to accept bond swaps with lower values. Instead, they took Argentina to court in New York and won. While Fernandez branded the group “vultures” and refused to negotiate, Macri made reaching an agreement one of his top priorities. “It’s the first step. It’s as important as opening the door,” Macri said.

“We need to stop arguing about things that don’t help Argentina grow.” In the weeks since assuming power, Macri’s administration has rewritten much of the country’s social contract. It lifted export taxes on the agricultural sector, effectively freeing up one of the world’s breadbaskets, and it lowered import taxes, devalued the Argentine peso, cut energy and other subsidies, and fired thousands of public workers.

Macri agreed his administration has yet to make good on his promise to curb inflation, which approached 40 percent last year. Prices that were already skyrocketing jumped even more when the peso was devalued in December.

The president said his economic changes need more time to bear fruit. “A year from now, we hope to be growing, and we hope to be receiving investments from all over the world,” he said. As he often did during the campaign, Macri blamed Fernandez for overseeing “700 percent” inflation over the last several years. When asked whether he wanted to see Fernandez prosecuted for several alleged corruption scandals during her administration, Macri said he would not get in the way of any investigation, while noting that she has not been charged with any crime.

Macri also said he hoped investigators would get to the bottom of the mysterious death of prosecutor Alberto Nisman, who was found shot dead in his apartment early in 2015. Days before, Nisman had accused Fernandez of helping Iranian officials hide the Middle Eastern nation’s role in the 1994 bombing of a Jewish community center in Buenos Aires that killed 85 people and wounded hundreds. Fernandez has denied the allegations and the case against her was thrown out by a federal judge.

Nisman’s death, which has yet to be solved, shook Argentina. For many, it was one more sign of a justice system that doesn’t work, of impunity without limits. “Everything that happened made us look weak in the world,” Macri said. “But now we are determined to bring what happened to light.

2. ARGENTINE CONGRESS APPROVES DEAL WITH HOLDOUT CREDITORS (The Washington Post)
March 16, 2016

BUENOS AIRES, Argentina — The lower house of Argentina’s Congress has approved the government’s deal with holdout-creditors — a measure meant to give the country access to global credit markets.

The measure approved Wednesday now goes to the Senate for final approval.

The government lacks a majority in both houses of Congress, but won over a part of the Peronist opposition.

Under the deal, Argentina would pay $4.7 billion to resolve all related claims stemming from bonds issued in the U.S. before Argentina’s 2001-2002 financial collapse, when it it defaulted on $100 billion in bonds.

Most creditors renegotiated in bond swaps in 2005 and 2010. But a group of creditors refused to take lower-value bonds. U.S. courts rejected Argentina’s attempt to force those creditors to accept cut-rate terms.

3. AMERICA’S ROLE IN ARGENTINA’S DIRTY WAR (The New York Times)
By The Editorial Board
March 17, 2016

A few months after a military junta overthrew President Isabel Perón of Argentina in 1976, the country’s new foreign minister, Adm. Cesar Guzzetti, told Henry Kissinger, America’s secretary of state, that the military was aggressively cracking down on “the terrorists.”

Mr. Kissinger responded, “If there are things that have to be done, you should do them quickly,” an apparent warning that a new American Congress might cut off aid if it thought the Argentine government was engaging in systemic human rights abuses.

The American ambassador in Buenos Aires soon reported to Washington that the Argentine government had interpreted Mr. Kissinger’s words as a “green light” to continue its brutal tactics against leftist guerrillas, political dissidents and suspected socialists.

Just how much the American government knew about Argentina’s repressive “Dirty War,” which lasted from 1976 to 1983 — and the extent to which it condoned the abuses — has remained shrouded in secrecy.

When President Obama visits Argentina next week during the 40th anniversary of the coup, he should make a pledge that Washington will more fully reveal its role in a dark chapter of Argentine history. Military officials abducted thousands of civilians during this period. Hundreds of babies, stolen from Argentines who were arbitrarily detained, were raised by military families.

Human rights groups in Argentina have long sought access to classified American intelligence and diplomatic records, hoping that they will shed new light on the abuses and the fate of missing Argentines. The Argentine government itself has formally asked for declassification. “There is absolutely no doubt that the release of these records on repression in Argentina would reveal substantive information on the years of repression and advance the cause of truth and justice in that country,” said Peter Kornbluh, an analyst at the National Security Archive who specializes in Latin America.

In 2002, Washington partly declassified roughly 4,700 State Department records from the Dirty War period. Those documents have aided judicial proceedings and added to a historical record. But much of that record remains obscured.

Declassifying a more extensive set of documents would also bring into sharper focus a shameful period of American foreign policy, during which Washington condoned and in some instances supported the brutal tactics of right-wing governments in the region. It is time for the American government to do what it still can to help bring the guilty to justice and give the victims’ families some of the answers they seek.

4. NOT SO FAST: ARGENTINA STILL HAS SOME BOND HOLDOUTS (The Wall Street Journal Online)
By Julie Wernau
16 March 2016

Lucrative settlement with hedge funds leaves out many smaller investors who are likely to get much less

Argentina’s lucrative settlement with hedge funds holding its defaulted bonds was hailed as a landmark. But it leaves out several hundred smaller investors—many holding the same bonds—who are likely to get much less.

Individual savers, pensioners and small money managers in Argentina and around the globe have claims that add up to about $2 billion. They didn’t take the 30 cents on the dollar Argentina offered after it defaulted on $80 billion in debt in 2001, and they aren’t eligible to get the same relatively generous terms struck in the $4.65 billion deal with the hedge-fund holdouts.

Instead, they are subject to the public offer Argentina made to all bondholders last month. Payouts under that proposal would vary widely based on which bonds are involved, whether the holder had a court judgment, and how the bonds’ interest accumulated. Some investors could receive up to 70% of their claims, while others could walk away with as little as 24 cents on the dollar, according to bond-research firm Exotix Partners.

The hardball offer threatens to leave some investors with little to show for their decade-and-a-half wait and could cut into the goodwill Argentina won in international markets when it moved to resolve the long-simmering dispute with the hedge funds.

“As long as there are lawsuits, there isn’t normalcy,” said Diego Ferro, co-chief investment officer at Greylock Capital Management, which has about $1 billion under management and plans to pass on any new bonds issued by the country as it contemplates a return to the capital markets. “I think there are things that are much more interesting in emerging markets than buying Argentina.”

The big bondholders, led by Paul Singer’s Elliott Capital Management, reached a deal last month to receive about 75% of what they said they were owed. Elliott is taking home 10 to 15 times what it paid for some Argentine debt, bond analysts say.

Argentina’s most recent proposal to smaller bondholders offers one of two payouts: 70% of a claim, including interest, or 150% of the principal value of the bonds. It is the best offer this last set of holdouts has received, but is less than what the hedge funds negotiated.

Some smaller bondholders​called the offer confusing and asked for a 30-day extension, but were rebuffed by a U.S. court. Others continue to press their cases.

“They can’t just leave us out in the cold,” said Mohammad Ladjevardian, an investor in Houston who said ​the offer covers just 50% of his claims and is litigating in a U.S. court to get more.

Mr. Ladjevardian bought Argentine government bonds in 1997. The country’s low debt to gross domestic product ratio and abundant natural resources made them​seem like a safe bet, he said. But the economy went into recession and Argentina was forced to pay increasingly higher yields on its debt to attract foreign capital, eating up reserves and leading to default.

His family holds an unpaid 2007 court judgment against Argentina, but he worries he has run out of options for the bonds, which account for about 70% of ​his family’s net worth. Mr. Ladjevardian said Argentina is offering to pay 150% of ​the ​principal value of his bonds. That works out to about half of what he claims he is owed​given the large amount of interest that has accrued over the years.

The ​ remaining holdouts are running out of time to fight. The hedge funds had an important bargaining chip in their negotiations: An injunction preventing Argentina from raising money in the international capital markets until the dispute was resolved. Their settlement has led a New York federal judge to say he is prepared to lift the injunction, and Argentina has indicated plans to sell about $12 billion in bonds when the agreement becomes final as early as next month. Once Argentina re-establishes its access to the capital markets, the remaining bondholders will have little bargaining leverage.

On Wednesday, Argentina moved closer to returning to the bond market when its lower house of Congress voted to approve President Mauricio Macri’s deal with the hedge funds. The Senate vote is expected next week.The judge has said that approval is necessary before he lifts the injunction.

“Argentina could just ignore the rest of the folks who have not been paid,” said Jennifer Scullion, a partner at Proskauer Rose LLP, who represents bondholders in eight class-action cases in New York.

How Argentina resolves the issue could pose a test for the new government led by Mr. Macri. His administration has been lauded at home and in the U.S. for ending a bitter 15-year stalemate with overseas bondholders by reaching a deal in only three months. But some investors say they are judging the new government not only by how it negotiated with people like Mr. Singer, but how it treats less powerful bondholders, too.

“What they should have done is had a deal where everyone could be involved, get the same terms,” Jim Craige, a portfolio manager at Stone Harbor Investment Partners, said of the Argentine government. The firm has $35 billion under management in emerging markets, including Argentine bonds. He said he hasn’t decided if he will buy the new debt. A concern, he said, is “they don’t respect bondholder rights.”

A spokesman for Mr. Macri was not available for comment.

Cesar Castro, a 60-year-old Argentine investor, said he bought his country’s sovereign debt in the late 1990s after seeing patriotic advertisements in Argentine newspapers encouraging citizens to purchase local bonds. Mr. Castro said in those days the local currency was pegged one-to-one to the U.S. dollar, inflation was low and Argentines like him trusted the government to pay. Now he feels differently.

“There has to be some kind of punishment to the government,” he said.

5. ARGENTINA’S LOWER HOUSE APPROVES DEBT DEAL WITH CREDITORS (The Wall Street Journal Online)
By Taos Turner
16 March 2016

Senate is expected to vote on the plan later this month

BUENOS AIRES—Argentina’s lower house of Congress on Wednesday approved a deal to settle a long-running legal dispute with creditors who hold defaulted Argentine bonds.

After a marathon overnight debate session, the lower house voted 165 to 86 to approve the deal. The plan now moves on to Argentina’s Senate, which is expected to vote on it later this month.

Last month, President Mauricio Macri agreed to pay $4.65 billion to Paul Singer’s Elliott Management Corp. and three other hedge funds to settle their claims against Argentina.

Earlier Wednesday, Sen. Federico Pinedo, who leads Mr. Macri’s Pro party in the upper house, said he is confident he will have the votes needed to approve the deal. Mr. Pinedo said Argentina’s provinces have run out of money and will support the agreement because it will help them obtain the funds needed to invest in public-works projects.

“Argentine provinces need financing. We need to invest $100 billion in infrastructure projects like roads and ports,” he told Radio Continental in an interview. “We think the interest of the provinces will outweigh partisan interests.”

Still, Mr. Macri may need to horse trade in the Senate, where the opposition Victory Front Party has a majority. The party, which is loyal to former President Cristina Kirchner, has long argued against supporting Mr. Macri’s plan to settle with the hedge funds.

The Victory Front party holds 43 out of the Senate’s 72 seats, meaning the government will need to persuade some senators to break with the party if the legislation is to pass.

Argentina owes the money to the hedge funds because they own bonds that Argentina defaulted on in 2001, and they obtained favorable rulings from U.S. courts that require Argentina to settle up on its debt. Mrs. Kirchner’s refusal to settle with the hedge funds prolonged a legal conflict that is keeping Argentina locked out of foreign credit markets.

Mr. Macri has said that approving the agreement is critical to his to plans to jump-start an economy that has shown little or no growth in four years. A deal would give Argentina access to credit markets, allowing the federal government—as well as companies and provinces here—to obtain billions of dollars in fresh financing.

Without that financing, Mr. Macri and his finance minister, Alfonso Prat-Gay, have said the government would have to drastically cut spending, further damaging an economy already suffering from annual inflation totaling 30% or higher.

6. CHINA CALLS FOR INVESTIGATION INTO ARGENTINE SINKING OF FISHING VESSEL (The Wall Street Journal Online)
By Chun Han Wong and Taos Turner
16 March 2016

Argentine coast guard fired on and sunk a Chinese boat on Monday; no casualties reported

BEIJING—China on Wednesday expressed “serious concerns” over Argentina’s recent sinking of a Chinese trawler for alleged illegal fishing off the Argentine coast.

In a statement, China’s foreign ministry confirmed that the Lu Yan Yuan Yu 010 was operating in Argentine fishing waters when it was fired upon and sunk by Argentina’s coast guard on Monday, after an hours long pursuit.

Argentina’s foreign ministry declined to comment on the incident.

On Monday, Argentina’s coast guard rescued four members of the boat’s crew while another 28 were rescued by nearby Chinese fishing boats, China’s foreign ministry spokesman, Lu Kang, said in the statement. No casualties were reported.

The incident is the second involving a Chinese fishing boat in two weeks, an Argentine coast guard official said Wednesday. Twelve days ago, the coast guard tried to detain another Chinese boat for operating in Argentine waters. The coast guard fired warning shots at the boat, but the vessel eluded capture.

Chinese fishing boats routinely interact with coast guard ships but are generally more cooperative, the official said.

The last time a similar incident required Argentina to rescue Chinese fishermen was 15 years ago, the official added.

Chinese diplomats have called for an investigation into Monday’s incident and asked Argentine officials to “take effective measures to avoid any repetition of such an incident,” Mr. Lu said.

Argentina’s coast guard, formally known as Naval Prefecture, said it intercepted the Chinese boat off the coast of Puerto Madryn, a city located about 750 miles south of Buenos Aires, Argentina’s capital. The trawler was detected within Argentina’s exclusive economic zone, where the country has sole rights to exploit its natural resources, the coast guard said in a statement.

The trawler didn’t respond to repeated warning signals or radio calls made in both English and Spanish. Instead, it turned its lights off and tried to flee back into international waters. The coast guard fired warning shots at the boat, which also failed to stop it. The trawler then tried to ram directly into an Argentine coast-guard vessel, “putting its crew’s life at risk,” according to the coast guard statement.

Argentine officials then fired at the Chinese boat, causing it to sink, the coast guard said.

The coast guard didn’t say on Wednesday what would happen to the four Chinese crew members, including the boat’s captain, who were detained on Monday.

7. ARGENTINA’S LOWER HOUSE PASSES DEBT BILL TO SETTLE WITH HOLDOUTS (Bloomberg News)
By Charlie Devereux
March 16, 2016

* Lower house voted 165 for with 86 against in favor of bill
* Argentina needs to resolve dispute to return to credit markets

Lawmakers in Argentina’s lower house of Congress voted Wednesday to approve a bill that seeks to end a 15-year legal battle with disgruntled creditors from the 2001 default which would pave the way for the nation to return to international capital markets.

Lawmakers voted 165 for and 86 against to support a package of measures that calls for the repealing of two laws that prevent the government from paying some creditors, the approval of the accord which calls for settling at a discount of about 25 percent and permission to issue about $12 billion of debt to pay holdouts. The bill now goes to the senate for final approval.

President Mauricio Macri is seeking to put an end to a dispute that has isolated Argentina financially as he seeks to close the largest fiscal deficit in nearly 20 years and tame inflation of 30 percent. The government, which doesn’t have a majority in either house, was obliged to grant some concessions to the opposition in order to secure enough votes. Macri is trying to obtain congressional approval for the plan and the issuance of billions of dollars in bonds before an April 14 deadline established with creditors.

While the opposition alliance has the majority in the Senate, it is riven by divisions and most of their legislators will be open to bargaining in exchange for funds that benefit their provinces. Most of the provinces also have a pressing need to access international credit at lower borrowing costs.

8. ARGENTINA’S PUENTE LOOKS TO 2017 IPO IN STEPS FOR GLOBAL REACH (Bloomberg News)
By Carolina Millan
March 16, 2016

* Company names Emilio Ilac as new CEO, Tomasevich as Chairman
* Puente will announce new strategic partnership in next month

Puente, an Argentine investment bank and brokerage, is looking to expand its international reach with plans for an initial public offering in 2017.

The company, which seeks to sell a stake of about 20 percent through the IPO, may consider holding the offering in London or New York, company officials said Wednesday. Puente also announced that Emilio Ilac will become its new chief executive officer as predecessor Federico Tomasevich takes on the role of global chairman.

“In the next three or four years, Argentina will be the star of emerging markets, which will naturally spill over to Paraguay and Uruguay, so we want to consolidate the focus on these countries,” Ilac said in an interview. “We’re seeing appetite for Argentina grow in a very aggressive way in Asia and the Middle East, and we want to be the main conduit for institutional investment to the Southern Cone.”

Puente looks to benefit from increased investor interest in Argentina after the election of President Mauricio Macri, a market-friendly candidate who has ended currency controls, removed most export taxes and reached a milestone settlement with holdout creditors leftover from the country’s 2001 default in his first three months in office.

Ilac also said he expects a high number of corporate finance deals this year, including deals in mergers and acquisitions and corporate debt sales once a decade-long dispute with creditors is resolved. Tomasevich told reporters that in the next 30 days the company will announce a strategic venture with an international partner.

Ilac, who moves up from his role as co-head of sales and trading, started at Puente in 2009 as assistant to the operations desk of the institutional clients.

The Buenos Aires-based company has offices in Paraguay, Uruguay, Panama and London. In the past year, Puente did investment banking transactions worth over $2.5 billion and handled $15 billion in trading volume. It oversees $3 billion in its wealth management division, Tomasevich said.

“Investment banking in the region had been mostly led by international banks,” Ilac said. “We think there’s huge growth potential in investment banking in the region and look to be a leader in this area.”

9. EU AND MERCOSUR TO EXCHANGE TRADE OFFERS IN APRIL, ARGENTINA SAYS (Reuters News)
By Robin Emmott and Francesco Guarascio
16 March 2016

BRUSSELS, March 16 (Reuters) – Europe and South America hope to revive stalled free-trade talks in early April with formal offers on how far they are willing to open up their economies to foreign goods, Argentina’s trade minister said on Wednesday.

After more than a decade of leftist rule in Argentina, the new pro-business government in Buenos Aires offers the Mercosur trade bloc led by Brazil its best chance in years to complete a deal that has faced multiple setbacks since its launch in 1999.

“Argentina is ready to move forward,” Miguel Braun told Reuters during a visit to Brussels to meet EU trade officials to discuss trade talks. “For Mercosur, this is a priority.”

Attempts to relaunch the trade talks, most recently at an EU-Latin American summit in Santiago in 2013, failed because of Argentine policies to protect local industry, diplomats say.

Brazil and its other Mercosur partners, Paraguay and Uruguay, were unwilling to do a trade deal without Buenos Aires, despite the urging of Brazilian business.

Argentina is Brazil’s closest partner, but until the November election of Argentine President Mauricio Macri, it was one of the most protectionist members of the Group of 20 leading economies.

DUTY-FREE ACCESS

The so-called ‘exchange of offers’ would set out the duty-free access each side is willing to consider and then allow negotiators to draw up a trade deal designed to encompass 750 million people and $130 billion in annual trade.

The foreign minister of Uruguay, which holds the rotating Mercosur presidency, will visit Brussels on April 8 and the exchange of offers could take place then, and no later than the middle of this year, Braun said.

“The Uruguayan foreign minister is coming here specifically with a proposal to exchange offers,” Braun said. “It would be fantastic if they can get that moving then, we cannot move quickly enough.”

The Uruguay minister’s visit follows EU foreign policy chief Federica Mogherini’s trip to Argentina earlier this month, when she met Macri and pledged EU support for a free-trade deal.

While the EU and Mercosur have already held many rounds of trade talks over the years, both sides are eager to avoid a repeat of 2004, when the offers made on both sides were considered too timid, failing to liberalise flows in trade and services and resulting in a collapse of talks.

The market access proposals involve lists of imports that each side would be prepared to liberalise in negotiations. The European Union is looking for more than 90 percent of goods and sectors to be opened up, EU officials said.

Difficult areas include access to Mercosur for European manufactured goods and EU access for Mercosur’s agricultural products, which today face high EU farm subsidies.

10. ARGENTINA’S LOWER HOUSE CLEARS DEBT SETTLEMENT PACKAGE (Reuters News)
By Richard Lough
March 16, 2016

Argentina’s President, Mauricio Macri, won the support of the lower house of Congress for a settlement with bondholders on Wednesday, leaving Argentina one Senate vote away from ending a 14-year battle with creditors.

Lawmakers across the political divide voted 165 to 86 to approve the deal after a 20-hour televised debate.

Macri needs to close the festering dispute to tap global credit markets and lure back investors, and had warned Argentina faced a return to hyperinflation or aggressive spending cuts if the chamber had knocked down the proposal.

Legislators loyal to former leftist president Cristina Fernandez, a Peronist who refused to negotiate with the bondholders, argued Macri was selling out to Wall Street investors by offering repayment terms of 70-75 cents on the dollar.

Former Economy Minister Axel Kicillof blasted the government’s proposal to finance the accords brokered in New York with a planned $11.68 billion bond issuance, saying it would increase government debt.
“We’re not increasing debt. We’re decreasing it,” Mario Negri, a senior lawmaker in Macri’s Let’s Change alliance, said minutes ahead of the vote, referring to the write down on outstanding debt agreed with investors.

Among the agreements negotiated in New York is a $4.65 billion cash payment to the main holdout creditors, including billionaire Paul Singer’s Elliott Management. Argentina has until April 14 to make the payment.

Macri garnered enough votes to push the vote through the lower chamber after making last minute concessions to secure the support of dissident Peronist Sergio Massa and his lawmakers, plus a group of legislators which split with Fernandez last month.

They won the insertion of a collective action clause, which requires creditors to negotiate together for any changes in bond payment terms, and a cap of $12.5 billion on the bond sales, according to state-run news agency Telam.

Massa said it was now time for lawmakers to debate matters important to him: inflation, the income tax threshold and pensions.

The bill now moves to the Senate, where the opposition’s majority is dogged by internal divisions and Macri will expect to leverage support in return for government funds and access to lower borrowing costs to finance much-needed infrastructure projects.

The dispute stems from Argentina’s default on $100 billion in bonds in 2002. The holdout creditors rejected 2005 and 2010 debt swaps that offered 30 cents on the dollar.

11. ARGENTINA’S YPF APPEALS COURT ORDER TO SHOW CHEVRON PACT DETAILS (Reuters News)
By Maximilian Heath
March 16, 2016

Argentina’s state energy company YPF (YPFD.BA) said on Wednesday it appealed a local court ruling ordering it to disclose details of its contract with Chevron Corp (CVX.N), amid allegations of secret clauses in the agreement.

Chevron in 2013 signed a deal to explore the Vaca Muerta shale formation. It was the largest foreign investment in Argentine energy since the government seized Spanish giant Repsol’s (REP.MC) controlling stake in YPF the year before.

Opposition lawmakers believe the contract contains secretclauses that hand concessions to Chevron and undermine national interests.

“Shareholders decided to appeal the resolution issued by the Administrative Court Federal No. 7,” YPF said in a statement.
On Monday the court gave YPF five days to disclose contract details. The Supreme Court said in November that the company “cannot deny access to information of unquestionable public interest.”

12. ARGENTINA’S YPF TO APPEAL ORDER TO DISCLOSE CHEVRON CONTRACT (Platts Commodity News)
By Charles Newbery
16 March 2016

Buenos Aires (Platts)–16Mar2016/1009 pm EDT/209 GMT Argentina’s state-run energy company YPF said Wednesday it would appeal a court order to make public the full contents of a joint venture contract with Chevron to develop shale resources.

The board of directors decided to appeal in order “to safeguard the public interest and that of its shareholders [public and private],” YPF said in a statement.

YPF and Chevron teamed up in 2013 to develop Loma Campana, the first mass development of Vaca Muerta, one of the world’s biggest shale plays. The companies have since invested more than $2.5 billion and drilled more than 470 wells. Loma Campana is the source of most of YPF’s shale production, which rose to 50,600 b/d of oil equivalent in the fourth quarter last year, from 38,000 boe/d a year earlier, Platts reported previously.

Judge Cristina Carrion de Lorenzo of the No. 7 Federal Administrative Court ruled Monday that the company would have to divulge the full contents of the partnership contract. This was in line with a Supreme Court decision in November.

YPF in February complied with the Supreme Court ruling to make the agreement with Chevron public, but withheld disclosure of confidential clauses to protect commercial, financial and geological information of strategic value to both companies.

YPF said at the time — and repeated in this latest statement — that if such information was made public, it would put both companies at a disadvantage against competitors, contractors and potential partners.

YPF added now that the latest court ruling did not take into account the company’s “request for a hearing” and “did not establish precautions to prevent disclosure to third parties outside the process [competing companies and other stakeholders] of information with clear geological, commercial, technical and industrial value.”

The lack of such protection could put the company at “a competitive disadvantage” and threaten the development of Loma Campana and the company’s future projects, YPF said.

YPF also said that public disclosure of the full contract could be used “for political means” without taking into account the damage it would cause for YPF and “future oil and natural gas investment projects in the country.”

This is the latest legal battle over disclosure of the contract, which has divided much of the political class. While some members of the government of President Mauricio Macri had been in favor of the public disclosure of the contract before taking power in December, some have changed their opinion. Last week, the Anti-Corruption Office came out in favor of YPF, saying confidential clauses are an industry norm around the world.

YPF is 51% owned by the state and 49% by private shareholders, and is traded on the Buenos Aires and New York stock exchanges.

As well as working with Chevron, YPF has entered into joint ventures to develop Vaca Muerta and other unconventional plays with Dow Chemical, Argentina’s Petrolera Pampa and Malaysia’s state-owned Petronas. It also has held talks with ExxonMobil, Russia’s Gazprom and other companies, and signed a memorandum of understanding with American Energy Partners, or AELP, for a shale oil development project.

YPF produces 43% of Argentina’s 532,000 b/d of crude and 30% of its 120 million cu m/d of gas, according to the Argentine Oil and Gas Institute, an industry group.

13. CHINA DEMANDS INVESTIGATION AFTER ARGENTINA SINKS FISHING BOAT (UPI)
By Andrew V. Pestano
March 16, 2016

BUENOS AIRES, March 16 (UPI) — Argentina’s coast guard on Monday sank a Chinese fishing boat that it says was fishing illegally in its exclusive economic zone off the Atlantic coast.

In a statement, the Argentine Naval Prefecture said it tried communicating with the boat, the Lu Yan Yuan Yu 010, via radio in Spanish and English and with both visual and audio signals, and that the Chinese vessel failed to respond.

The Argentine coast guard then said one of its ships fired a warning shot as the Lu Yan Yuan Yu headed for international waters. The Chinese ship was later sunk and all 32 crew members were rescued.

“The vessel was hailed over radio and both visual and audio signals were sent to make contact. However, the vessel turned off its fishing lights and proceeded to flee towards international waters without responding to repeated calls over various frequencies,” the Argentine Naval Prefecture statement says. “On several occasions, the offending ship performed maneuvers designed to force a collision with the coastguard, putting at risk not only its own crew but coastguard personnel, who were then ordered to shoot parts of the vessel.”

In response to the incident, Chinese Foreign Ministry spokesman Lu Kang said Beijing expressed “serious concern” and has “made urgent representations” to Argentina, also demanding a thorough investigation.

14. ARGENTINA SINKS CHINESE FISHING BOAT (Foreign Policy)
By Thomas E. Ricks
March 16, 2016

This is interesting: The Argentine coast guard tried to stop a Chinese fishing boat that it believed was operating illegally in an area rich with squid. The Argentines say that the Chinese boat refused to heed an order to stop and instead tried turned off its running lights and aimed to crash into their craft. The Argentines report that fired warning shots and then, after several hours of giving chase as the boat headed to sea, shot into the ship, apparently with great success.

The Argentines rescued four members of the fishing crew, while 28 others were picked up by other boats in the Chinese fleet.

I keep on returning to the thought that the Chinese ultimately are their own worst enemy in international relations, overstepping and treating others with contempt. I wonder how many Argentine warnings were ignored before this happened. On the other hand, Mario Vargas Llosa once described the ego as “the little Argentine that lives inside all of us.”

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FRIDAY
1. IN ARGENTINA, OBAMA WILL CHEER ON SOUTH AMERICA’S SHIFT AWAY FROM THE LEFT (The Washington Post)

2. US TO DECLASSIFY MILITARY RECORDS ON ARGENTINA’S “DIRTY WAR” (The Washington Post)

3. OBAMA TO UNSEAL FILES ON ARGENTINA’S ‘DIRTY WAR’ (The New York Times)

4. ‘DIRTY WAR’ RECORDS (Pittsburgh Post-Gazette)

5. U.S. TO DECLASSIFY INTELLIGENCE, MILITARY RECORDS ON ARGENTINA’S ‘DIRTY WAR’ (Reuters News)

6. ARGENTINA POLITICS: QUICK VIEW – HOLDOUT LEGISLATION MAKES PROGRESS IN CONGRESS (Economist
Intelligence Unit – ViewsWire)

7. AFTER 14 YEARS OF LAWSUITS, ARGENTINA REACHES SETTLEMENT TO REPAY DEBT (NPR: All Things Considered)

8. ARGENTINA NOW SEEKS 600MW FROM BOLIVIA (Business News Americas)

9. WHY ARGENTINA’S DEBT DEAL SPELLS BAD NEWS (Fortune)

10. HOW NOT TO FIX ARGENTINA’S INFLATION PROBLEM (PanAm Post)

11. HOW ECONOMIC FREEDOM CAN BE RESTORED IN ARGENTINA (The Heritage Foundation)

12. ARGENTINE PRESIDENT: WE WILL “MAKE HEADWAY” WITH AMIA INVESTIGATION (The Tower Org)

13. HAS ARGENTINA ENTERED THE ‘WAR ON DRUGS’? (Open Democracy)

14. A SADIST IN A BENIGN PATRIARCH’S CLOTHING (The New York Times)

15. ARGENTINIAN CRIME STORY (The Wall Street Journal)

16. PABLO TRAPERO ON TACKLING REAL-LIFE CRIME STORY BEHIND ‘THE CLAN’ (Variety

1. IN ARGENTINA, OBAMA WILL CHEER ON SOUTH AMERICA’S SHIFT AWAY FROM THE LEFT (The Washington Post)
By Nick Miroff
March 17, 2016

BUENOS AIRES — Ahead of President Obama’s trip to Cuba and Argentina March 20 to 24, nearly all the attention — and controversy — has centered on his visit to the communist island, the first by a sitting U.S. president in 88 years.

But Obama’s trip to Argentina is no afterthought, and is arguably more important to the future of U.S. relations with Latin America.

He arrives at a moment of epochal political change in South America. After more than a decade of dominance by leftist populist leaders, many of whom thrived on opposition to the United States, the continent is swinging back toward the center. Obama wants to push it along.

Falling prices for oil, minerals and other commodity exports have sapped economic growth and crimped government spending on social welfare programs, ripping bandages off old problems like corruption, crime and lousy public services. Leftist incumbents across the region who once seemed unassailable are now in trouble.

Argentina was the first pin to fall. In November voters elected center-right candidate Mauricio Macri, bringing an end to 12 years of rule by the late Nestor Kirchner and his wife, Cristina Fernandez de Kirchner, who had aligned the country with Hugo Chavez’s Venezuela and clashed eagerly and often with Washington.

A wealthy businessman fond of jeans and polo shirts, Macri presents himself as a problem-solving pragmatist, a nonideological figure who wants to bring transparency and turn down the temperature of Argentine politics. He promises to deliver growth by attracting new foreign investment and re-engaging Argentina with the rest of the world. He is not in the habit of referring to the United States as “The Empire.”

“Argentina is the first country on the continent to turn away from the populism of the previous era, and that has made Macri a regional leader, whether it was his intention or not,” said Dante Sica, director of an economic consulting firm in Buenos Aires.

Macri’s success is far from certain. He moved swiftly to lift Kirchner-era currency controls on the Argentine peso, and since then it has lost 40 percent of its value against the dollar. Domestic food prices soared after he slashed export taxes on Argentine grains. His decision to cut electrical subsidies jacked up Argentines’ utility bills.

Macri and his team of economic advisers, many of whom bring Ivy League pedigrees and résumés from Wall Street, insist that these shocks are one-time, bitter pills to fix a badly distorted economy. But for a president elected by a narrow margin — Macri won just 51.5 percent of the vote and lacks a majority in Argentina’s congress — he is under enormous pressure to show results before his honeymoon runs out.

“These changes scare me,” said Vivian Valqui, a Peruvian immigrant who sells mattresses and furniture from a cramped shop in Villa 31, a Buenos Aires slum that sits right next to the city’s wealthiest business districts. Her sales have plunged. “People are worried because they don’t know what is going to happen next,” she said.

As mayor of Buenos Aires prior to winning the presidency, Macri made an impression in Villa 31 by visiting the neighborhood and supporting projects to pave the streets and install sewer lines. Settled by squatters in the 1930s during the Depression, Villa 31’s residents still lack property titles.

Analysts say Macri’s post-inaugural grace period won’t last beyond this year, if that.

If Macri fails, the fallout would ripple across the region, validating skeptics who say free trade and a friendlier approach to the United States remains a losing formula for Latin American governance.

Macri scored a major victory early Wednesday as Argentina’s lower house approved his proposed settlement with the holdout creditors whom the Kirchners had cast as “vultures” because they refused to renegotiate debt from Argentina’s 2001 default. After a 20-hour debate, the package won backing across the political spectrum and now faces a vote in Argentina’s senate that is also expected to break Macri’s way.

A deal would pave the way for a badly needed injection of foreign currency, lowering the demand for dollars and helping stem inflation.

Coupled with the visit by Obama — the first by a U.S. president in nearly 20 years — a settlement would send the signal that Argentina is open for business, said Lucas Llach, vice president of Argentina’s Central Bank. “Obama’s visit is a sign that we are returning to world markets,” he said, noting that it follows visits by the Italian prime minister and French president.

Macri’s adjustments should start to bear fruit in the second quarter of this year with slowing inflation, Llach said. But they have left him vulnerable to criticism by still-powerful Kirchner loyalists who see Macri as the latest incarnation of the laissez-faire economic policies many Argentines associate with the 2001 crisis that paved the way for the Kirchners’ rise to power.

Macri is banking heavily on his ability to attract new investment from foreign companies, particularly American firms that have been wary of putting money into Argentina over the past decade. Here Obama’s visit is critical as well. To offset the economic downturn, Macri, a civil engineer by training, is planning to launch big infrastructure projects. Advisers say he is acutely aware of the need to create new private sector jobs as he fires thousands of government workers hired by the Kirchners.

“We’re coming out of an era in which we hid unemployment with public sector jobs,” Macri said this month.

Mario Blejer, a banker and economist who was an adviser to Daniel Scioli, the candidate from the Kirchners’ party who lost to Macri, said Obama’s arrival could backfire on the new Argentine leader. “His opponents will use the visit to portray Macri as a puppet of Washington, and it’s not going to help that there will probably be a big demonstration against the president of the United States.”

Union leaders and anti-Macri activists will also be motivated by the timing of Obama’s visit. March 24 marks the 40th anniversary of the 1976 military coup, initially backed by the United States, and the seven-year “Dirty War” that left as many as 30,000 dead. Obama will fly to the Bariloche resort that day to play golf before returning to Washington.

With its on-again, off-again relationship with the United States, Argentina has been a bellwether for relations with Latin America in recent decades.

The country’s ties to the United States were so close in the 1990s under President Carlos Menem that his foreign minister famously called the relationship a “carnal” one. Then came the crash of 2001, which wiped out the savings of millions of Argentine families and left the country deeply skeptical of liberal economic policy prescriptions.

Elected in 2003, Nestor Kirchner brought stability, then presided over an economic bonanza driven by China’s voracious demand for Argentine grain and other exports.

It was in Argentina in 2005 that Latin America essentially split into two blocs during the Summit of the Americas. President George W. Bush arrived to promote a hemisphere-wide free trade agreement but faced massive protests and ridicule from Hugo Chavez. The free trade agreement failed and the Chavez-led bloc urged Latin American integration instead.

The United States is now partnering with Chile, Peru, Colombia and Mexico on the Trans-Pacific Partnership. Macri’s win raises the possibility that Argentina might seek to join the alliance.

During Obama’s visit, analysts say, Macri must execute a balancing act by embracing the U.S. president but not appearing too solicitous.

In an interview broadcast this week, Obama told CNN en Espanol that Argentina was an example of the United States’ changing relationship with Latin America, now that Macri had left behind policies that were “systematically anti-American.”

Macri, Obama said, “recognizes that we’re in a new era, and that we should look forward, and that Argentina, that has historically been a powerful country, has seen itself weakened by not adapting as efficiently to the world economy as it could.”

If Obama’s arrival — and Macri’s visit to Washington later this month for a nuclear summit — is meant to signal a reset in U.S.-Argentine ties, the new era may also face an unfavorable comparison to the “golden years” of booming trade with China, said Christopher Sabatini, an adjunct professor of Latin American studies at Columbia University.

“The risk is that Argentines will see the United States as a poor alternative to China, and if things don’t go well, they will associate the United States with pain and China with the sunny days of never-ending surplus,” he said.

Nick Miroff is a Latin America correspondent for The Post, roaming from the U.S.-Mexico borderlands to South America’s southern cone. He has been a staff writer since 2006.

2. US TO DECLASSIFY MILITARY RECORDS ON ARGENTINA’S “DIRTY WAR” (The Washington Post)
By Josh Lederman and Peter Prengaman 
March 17, 2016

WASHINGTON — President Barack Obama will move to declassify U.S. military and intelligence records related to Argentina’s “Dirty War,” the White House said Thursday, aiming to bring closure to questions of U.S. involvement in a notorious chapter in Argentina’s history.

Obama’s visit to Buenos Aires next week coincides with the 40th anniversary of the 1976 military coup that started Argentina’s 1976-83 dictatorship. Little is known about the U.S. role leading up to that period, in which thousands of people were forcibly disappeared and babies systematically stolen from political prisoners.

Susan Rice, Obama’s national security adviser, said Obama would use his trip to announce a “comprehensive effort” to declassify more documents, at Argentina’s request. She said Obama would also visit Remembrance Park in Buenos Aires to honor victims of the dictatorship.

“This anniversary and beyond, we’re determined to do our part as Argentina continues to heal and move forward as one nation,” Rice said in a speech ahead of Obama’s trip.

The announcement was sure to have a big impact in Argentina, where even today what happened during the dictatorship is often a part of the national discourse.

“This is transcendental. We believe it’s a huge gesture,” Marcos Pena, the Cabinet chief of Argentine President Mauricio Macri, told local channel Todo Noticias. Pena added that it would be welcomed by human rights groups who have questioned Obama’s presence on the anniversary.

The U.S. has previously released 4,000 State Department documents related to that period, but those documents tell only part of the story. Notes from a 1976 meeting between Secretary of State Henry Kissinger and Argentina’s foreign minister, for example, seemed to show Kissinger urging his new counterpart to clamp down on dissidents they referred to as “terrorists.”

“If there are things that have to be done, you should do them quickly,” Kissinger said, according to a transcript the U.S. declassified more than a decade ago.

In Argentina, human rights advocates have repeatedly called for the U.S. to divulge the rest of the information it has in hopes of exposing any wrongdoing.

As part of the new declassification effort, the U.S. will search for additional records related to rights abuses committed by the junta, said a senior Obama administration official, who wasn’t authorized to discuss the program by name and requested anonymity. That search will for the first time include records from U.S. intelligence agencies, along with the Pentagon, U.S. law enforcement agencies and records housed in presidential libraries, the official said.

Claudio Avruj, Argentina’s secretary of human rights, said opening the archives could shed light on Argentine soldiers trained at the School of the Americas and the so-called Plan Condor, a coordinated effort between South American dictatorships to stamp out dissent through assassinations, torture and repression.

“This is also going to help in the search for grandchildren taken during the dictatorship,” said Avruj via Twitter.

Gastón Chillier, executive director of the Buenos Aires-based Center for Legal and Social Studies, said, “These documents could help both in judicial cases of human rights abuses in Argentina and in the public debate about the role of the United States during the dictatorship.”

In an interview with The Associated Press on Wednesday, Macri sidestepped questions about whether he would ask Obama to declassify documents, a question activists had been raising ahead of Obama’s trip. He also dismissed criticism that Obama’s visit overlapped with the 40th anniversary of the coup that ushered in one of Latin America’s most brutal dictatorships.

Such opponents “need to realize that important world leaders have a very busy schedule,” Macri said, adding that Obama has been a staunch defender of human rights and should be welcomed.

Argentina’s government estimates that at least 13,000 people were killed or disappeared during the crackdown on leftist dissidents that became known as the “Dirty War.” Activists believe the figure was as high as 30,000.

The administrations of former President Cristina Fernandez, and before her, that of late husband Nestor Kirchner, oversaw massive efforts to try alleged perpetrators of crimes. Hundreds of former military officials have been convicted and jailed for their role in abuses during the dictatorship.

The South American nation also spends millions every year in search of missing, along the way developing a sophisticated DNA bank.

3. OBAMA TO UNSEAL FILES ON ARGENTINA’S ‘DIRTY WAR’ (The New York Times)
By Julie Hirschfeld Davis
18 March 2016

WASHINGTON — President Obama is moving to declassify American military, intelligence and law enforcement records that could reveal what the United States government knew about Argentina’s brutal ”dirty war” of the 1970s and ’80s, a senior adviser said on Thursday, hoping to pierce the shroud of secrecy that has surrounded a painful chapter in that country’s history.

Susan E. Rice, Mr. Obama’s national security adviser, said that the president would use a visit to Argentina on Wednesday and Thursday, which coincides with the 40th anniversary of the 1976 coup that began the war, to honor the victims and formally begin the declassification process.

”On this anniversary and beyond, we’re determined to do our part as Argentina continues to heal and move forward as one nation,” Ms. Rice said during a speech at the Atlantic Council in Washington.

Human rights activists have long pressed for access to more classified United States records about the war, which lasted from 1976 to 1983, a period when the Argentine government and military carried out vicious crackdowns against dissidents and abducted thousands of people, including babies taken from parents who were detained.

The Argentine government had formally requested that the documents be declassified. The issue has taken on greater urgency in recent days, after human rights groups noted that Mr. Obama would be in Argentina on the painful anniversary and began pressing him to use the occasion to acknowledge the abuses that took place.

Several of the groups, including Abuelas de la Plaza de Mayo — which works to find people who were taken as babies during the dictatorship and raised by families close to the military — submitted a formal request on Monday to the United States Embassy in Buenos Aires for Mr. Obama to release the secret records.

Peter Kornbluh, a senior analyst at the National Security Archive, a group that opposes government secrecy, said Mr. Obama should be applauded for engaging in ”declassified diplomacy.”

The president’s decision, Mr. Kornbluh said, ”not only provides a historical atonement for early U.S. support for the coup and the repression in its aftermath, but also can provide actual evidence and answers to the families of human rights victims who continue to search for their missing loved ones in Argentina, 40 years after the coup took place.”

In 2002, under pressure from human rights groups, the United States government released 4,700 partly declassified State Department documents on Argentina from the period. They included records that revealed the extent to which top American officials had been aware of the Argentine government’s brutal tactics. Among them was an account of a conversation in 1976 between Henry Kissinger, then the secretary of state, and César Augusto Guzzetti, the Argentine foreign minister, in which Mr. Kissinger appears to condone the military’s crackdown.

”If there are things that have to be done, you should do them quickly,” Mr. Kissinger told Mr. Guzzetti, according to the declassified account.

The administration refused at the time to do a multiagency review, so relevant records from the Defense Department, the Central Intelligence Agency and the Federal Bureau of Investigation remain classified. Mr. Obama’s effort will include records from military, intelligence and law enforcement agencies, as well as the presidential libraries and the National Archives, a White House official said on Thursday.

The president plans to travel to Argentina after a historic visit to Cuba, where differences over human rights remain an irritant even as the United States seeks to begin a new chapter of engagement. He will meet on Wednesday in Buenos Aires with Mauricio Macri, the newly elected Argentine president, and travel to Bariloche with his family on Thursday.

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4. ‘DIRTY WAR’ RECORDS (Pittsburgh Post-Gazette)
18 March 2016

WASHINGTON – President Barack Obama will move to declassify U.S. military and intelligence records related to Argentina’s “Dirty War,” the White House said Thursday, aiming to bring closure to questions of U.S. involvement in a notorious chapter in Argentina’s history.

Mr. Obama’s visit to Buenos Aires next week coincides with the 40th anniversary of the 1976 military coup that started Argentina’s 1976-83 dictatorship. Thousands of people were forcibly disappeared and babies systematically stolen from political prisoners.

Susan Rice, Mr. Obama’s national security adviser, said Mr. Obama would use his trip to announce a “comprehensive effort” to declassify more documents, at Argentina’s request.

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5. U.S. TO DECLASSIFY INTELLIGENCE, MILITARY RECORDS ON ARGENTINA’S ‘DIRTY WAR’ (Reuters News)
By Jeff Mason and Matt Spetalnick
March 17, 2016

The United States government will declassify documents from U.S. military and intelligence agencies related to Argentina’s 1976-83 “Dirty War,” the seven-year period when a military dictatorship cracked down on left-wing opponents, U.S. officials said on Thursday.

The move coincides with President Barack Obama’s visit to Argentina next week on the 40th anniversary of the 1976 coup that installed the dictatorship, which the United States initially supported. Argentina returned to democracy in 1983.

The declassification effort will include records from U.S. law enforcement agencies, the Department of Defense, the Department of State and the presidential libraries at the National Archives.

It follows the declassification in 2002 of more than 4,000 State Department cables and other documents related to human rights abuses from the 1976-83 period.

“President Obama, at the request of the Argentine government, will announce a comprehensive effort to declassify additional documents, including for the first time military and intelligence records,” U.S. national security adviser Susan Rice said in a speech hosted by the Atlantic Council in Washington.

“On this anniversary and beyond, we’re determined to do our part as Argentina continues to heal and move forward as one nation,” she said.

It is the latest effort by Obama to reconcile with Latin Americans by addressing Washington’s past backing of former military dictatorships in the region, such as he did on previous trips to Chile and Brazil.

The U.S. role in Latin America during previous administrations helped fuel ant-American sentiment, especially on the left.

Obama has declined on previous trips to Latin America to apologize for CIA activities in the region during decades past, but he left open the door to U.S. assistance in investigations of human rights abuses committed by former military governments there.

Argentina welcomed the announcement.

“Anything that helps analyze what happened during this chapter is a positive,” an Argentine government spokesman said, declining to comment further on a matter he said Obama and President Mauricio Macri would address.

Obama plans to visit Parque de la Memoria, or Memory Park, to honor the victims of that period.

The declassification announcement was aimed also at soothing criticism of the White House for planning the Argentina trip during such a sensitive week.

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6. ARGENTINA POLITICS: QUICK VIEW – HOLDOUT LEGISLATION MAKES PROGRESS IN CONGRESS (Economist Intelligence Unit – ViewsWire)
17 March 2016

Event

On March 16th the Chamber of Deputies (the lower house of Congress) approved a bill that would allow the government to pay holdout creditors who refused debt restructurings after Argentina’s 2001 default. The bill now moves to the Senate (the upper house) for final approval.

Analysis

The government is edging towards closing the deal that it struck in February to repay litigant holdout creditors. These creditors recently agreed to haircuts of around 25% on claims filed in the New York court system. Crucially, the judge in the case, Thomas Griesa, has agreed to lift injunctions that since mid-2014 have left Argentina in default on its restructured debt, if Argentina pays the holdouts by April 14th. This would allow the country to repay existing creditors and regain access to international capital markets.

First, however, Congress must repeal a law that forbids better terms than the previous restructurings and approve initial debt issuance of just under US$12bn to raise the cash for payment. (This includes almost US$9bn in payments to holdouts and US$3bn in arrears on restructured bonds in default since 2014).

The government, which does not have a majority in Congress, has been manoeuvring hard to build cross-party support in both houses of Congress for the necessary legislation. It has had to make some concessions, such as the inclusion of a ceiling on initial bond issuance of US$12bn. Although external indebtedness is low (the total external debt to GDP ratio is just over 20%, and around half of this is accounted for by the private sector), the question of raising the level of the debt is still somewhat politically contentious in Argentina, given the country’s experience with default.

However, pragmatism has prevailed, and an acceptance of the need for external finance to support growth and avoid balance-of-payments difficulties was evident in the bill’s passage through the lower house by a margin of 165 to 85. The bill now moves to the Senate (the upper house), where we assume that it will be approved, paving the way for payment of holdouts before the mid-April deadline. Senators generally vote according to the wishes of provincial governors, who are keen to tap bond global markets themselves and gain better access to multilateral loans to finance infrastructure projects.

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7. AFTER 14 YEARS OF LAWSUITS, ARGENTINA REACHES SETTLEMENT TO REPAY DEBT (NPR: All Things Considered)
By Robert Smith
17 March 2016

ROBERT SIEGEL: One of the world’s longest-running economic soap operas may end this week. Argentina is about to pay back its debts after 14 years of refusing to do so – 14 years of lawsuits and name-calling between the country and its lenders. Robert Smith of our PLANET MONEY team finds some lessons in the drama.

ROBERT SMITH: First lesson – when you find yourself in a hole, stop digging. Fourteen years ago, Argentina was in a hole so deep no one could see the sun. It was total economic collapse.

MARTIN MORATONA: The restaurants were empty. The main avenues of Buenos Aires were eerie because there was practically no traffic in the middle of rush hour.

SMITH: Martin Moratona was working for the city at the time.

MORATONA: And then one day, it all blew up. People started sacking supermarkets. And I remember there was this truck transporting cattle into Buenos Aires, and people blocked the highway. And they overturned the truck and took the cows. And then they practically slaughtered the cows right there in the middle of the highway because they were so desperate.

SMITH: There is no bankruptcy law for countries, no orderly way for a nation to figure out how to pay the bills when they have no money. So Argentina just said enough we need to feed our own people, so we’re not going to pay back all the foreigners who lent us money, which brings us to lesson number two. When it comes to owing money, you can run, but you cannot hide. Economist Juan Cruces says that a lot of people around the world wanted their money back.

JUAN CRUCES: Many university endowments, insurance companies, mutual funds purchased our bond, also institutional investors like TIAA-CREF in the United States.

SMITH: Wait a minute. TIAA-CREF is my retirement fund. Does that mean that I lent money to Argentina?

CRUCES: You did, indeed.

SMITH: In all, Argentina had defaulted on around a hundred billion dollars’ worth of loans. Now, what normally happens is the people who hold the bonds, the moneylenders – they start to negotiate with a country. But Hans Humes of Greylock Capital says Argentina wouldn’t return his calls.

HANS HUMES: I actually did a quiet trip down to Buenos Aires to talk to the debt negotiator and say, hey, listen; you know, what do we have in common? What’s the middle ground? The guy kicked me out of his office. He’s like, you have to leave right now.

SMITH: Argentina’s government had decided to play hardball – take-it-or-leave-it offer. They would give their lenders only around 30 cents on the dollar. For years, everyone fought and fought over this number. Most of the bondholders like Hans Humes eventually gave in.

HUMES: Just fatigue, I think a lot of people took it. It was just like, you know, I mean, what’s the point of fighting?

SMITH: Oh, but the final lesson of the Argentine story is that sometimes the scrappiest fighters win. A small percentage of the bondholders decided to hang in there, to keep up the battle. They were the hedge funds who had bought the debt cheap. They were called the holdouts, although, in Argentina, they had a different name for them.

CRUCES: Fundois Vitures – the vulture funds.

SMITH: And for the last seven years, they have circled Argentina and not given up. They have sued and sued. They finally found a New York City judge that was willing to stop Argentina from using New York banks to make payments, and economist Juan Cruces says this tipped the balance.

CRUCES: The judge’s decision gave the holdouts essentially an atomic bomb to put under their arm against the debtor.

SMITH: It may not be the lesson that you want to teaching to your children, but wielding an atomic bomb is effective. Today, lawmakers in Argentina are poised to approve a settlement for the hedge funds that wouldn’t give up. One fund, Elliot Management, is expected to get $2.4 billion on the deal. It was expensive, but after 14 years, Argentina can finally say they are out of the hole. Robert Smith, NPR News.

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8. ARGENTINA NOW SEEKS 600MW FROM BOLIVIA (Business News Americas)
17 March 2016

Argentina has submitted a counterproposal to Bolivia for the supply of 600MW versus the 160MW the latter country offered earlier this month.

“The surprise is that they want much more volume and have made a counterproposal that arrived two days ago,” Bolivia’s state news agency ABI quoted the landlocked nation’s hydrocarbons and energy minister (MHE) Luis Alberto Sánchez as saying.

Sánchez said an agreement is expected to be reached in the coming weeks to export power to Argentina.

Latest data from Argentina’s wholesale power market administrator Cammesa reveals that power use in February grew 10.2% year on year to 11,751GWh amid above average summer temperatures.

The minister’s comments followed the signing (pictured) of loan agreements between Bolivia’s central bank (BCB), MHE and state power company Ende for transmission projects, including a link with Argentina.

One loan for 483mn bolivianos (US$71mn) is for the 110km Juana Azurduy de Padilla project which will run from Yaguacua in Yacuiba to Tartagal in Argentina, and will be Bolivia’s first 500kV line. Construction is due to take 18 months.

The other loan, for 663mn bolivianos, is for the 230kV 329km Anillo Energético del Sur project that will stretch from Las Carreras in Tarija to Potosí.

Anillo aims to dispatch power from hydroelectric plants such as Carrizal and Molineros, as well as the Laguna Colorada geothermal complex and solar parks. Planned offtakers include the San Cristóbal mine and Bolivia’s lithium project.

Also from Bolivia, lawmakers approved cooperation agreements that MHE inked with Russia’s state atomic energy corporation Rosatom.

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9. WHY ARGENTINA’S DEBT DEAL SPELLS BAD NEWS (Fortune)
By Paul Blustein
March 17, 2016

Rich investors are winning big, but the case sets an awful precedent.

As a personification of “the rich getting richer,” Kenneth Dart is in a class by himself. A member of a reclusive, strife-ridden Michigan family that made its fortune from the manufacture of Styrofoam cups, Dart now controls a multinational empire—his net worth was estimated a couple of years ago at $6.6 billion—from a base in the Cayman Islands. According to one of his brothers, from whom he became estranged, he once considered making his home on his 220-foot yacht, which was armored to withstand torpedo fire. He escaped federal tax liability by renouncing his U.S. citizenship and becoming a citizen of Belize; he gained notoriety in the 1990s when he sought to become a Belizean consul based in Sarasota, Florida, where his parents, wife, and children lived.

The latest of Dart’s many windfalls is about to materialize in one of his specialties—squeezing profits from countries that have essentially gone bust. He made a tidy sum in 2012 on Greek government bonds, and now he stands to earn another packet on Argentina, a decade and a half after its catastrophic collapse and default on its debt. The newly-elected Argentine president, Mauricio Macri, has struck a generous settlement with Dart and other investors who put the country in a severe financial bind by filing lawsuits over its default.

This is no mere iniquity. The implications are global—and disquieting. The way Argentina’s debt saga is ending bodes ill for future cases of countries that fall into financial distress, because investors now have a clear incentive to pursue aggressive strategies similar to the approach taken by Dart. Not that Macri should be blamed; he is rightly drawing praise for taking action that is necessary for his country’s economic revival. But the difficulties for other countries that need debt relief will be all the greater. The case for reform of international rules governing such crises has never been stronger.

A look at what Dart did in Argentina explains why he is often called a “vulture investor”—and why the success of vulture investors has convinced economists at the International Monetary Fund, among others, that a better system is needed for countries that get over their heads in debt. Unsurprisingly, a major part in the Argentine drama was also played by the most famously litigious vulture of all, billionaire Paul Singer, who heads a New York hedge fund. Like Dart, Singer reaped hundreds of millions of dollars in profits on bonds of countries stricken by debt crises in the 1990s; their targets included countries such as Peru, Brazil, Nicaragua and Congo.

Recall that in 2001, Argentina was hurtling toward one of the worst financial and political crises in history. The country had once been the darling of Wall Street, which happily helped Buenos Aires borrow tens of billions of dollars. But the Argentine economy was mired in recession with no easy escape, and the burden of repaying principal and interest on $100 billion in debt was proving too heavy.

For the vultures, this was an opportunity to make a killing. They bought loads of Argentine bonds, which were then trading at pennies on the dollar. Even though the economy crashed at the end of 2001, and the government declared a halt to payments on its bonds, the vultures had a plan; indeed, some of their bond purchases came after the default. They were going to make Argentina pay as close to the full face amount of their bonds, plus interest, as possible—and they had a hunch that the law might eventually work in their favor. Boy, were they right.

The vultures rejected a deal that Argentina gave to its bondholders in 2005, which provided about 33 cents on the dollar. (In U.S. dollar terms, the Argentine economy had shrunk by about two-thirds, so this wasn’t quite as unreasonable as it may sound.) Even though more than 90% of the bondholders ended up accepting Argentina’s terms (after a second offer in 2010), the vultures held out for more—lots more.

Since Argentina had sold many of its bonds in New York to big financial institutions, disputes were subject to U.S. law, and the vultures could take advantage of the American legal system to press their claims. Sure enough, the federal judge overseeing the litigation, Thomas Griesa, ruled that they should be paid. Not that anyone could force Argentina to hand over money; a sovereign government is pretty well protected against foreign legal judgments that it deems invalid, and most of its assets abroad (embassies, for example) are immune from seizure. But the vultures’ lawyers skillfully used the courts to harass Buenos Aires — filing claims against overseas accounts belonging to the Argentine central bank, for example, and even seizing money from a Science Ministry account at a U.S. bank that was intended to pay for telescopes. In addition to making it risky for Argentine government-related entities to operate internationally, this litigation made it impossible for the Argentine government to raise new funds in international bond markets. Nonetheless, the Argentines remained steadfast in refusing to bow to the vultures’ demands or the U.S. court judgments.

The transformative event was a 2012 ruling by Judge Griesa that was the legal equivalent of putting Argentina at the mercy of gunboat diplomacy. (The term refers to the practice, common during the age of imperialism, of dispatching militaries to enforce financial claims.) Invoking certain legal wording in bond contracts, the judge decreed that as long as Argentina continued to deny the vultures payment on their claims, it would be forbidden to continue paying principal and interest to the bondholders who had accepted the earlier deals. Not only that, the judge put teeth into his ruling, by issuing an injunction prohibiting banks and other financial institutions from taking any action that would violate it.

Many legal experts expressed perplexity at the reasoning in Griesa’s ruling, not least because it threatened the rights of bondholders who had accepted Argentina’s earlier deals to collect what they were owed. What sane bondholder would go along with a debt restructuring offer in the future, given the risk that a single holdout might be able to block payments under the new terms? At the IMF, anguish was profound, enough so that Fund officials planned to enter an Amicus Curiae (friend of the court) brief urging the Supreme Court to overturn the decision. But the High Court declined to even consider the appeal. The mutually destructive stalemate continued, with former president Christina Kirchner vowing never to surrender to “financial terrorism.”

Enter Macri, whose victory last November marked a sea change in Argentine policy from strident, nationalistic leftism to an approach favoring re-integration with the global economy. In recognition of the benefits Buenos Aires would reap by folding its losing hand in the legal battle, the new president promptly negotiated deals with the vultures and other holdouts, giving them much—though not all—of what they were demanding. To Judge Griesa’s credit, he helped nudge these deals along, by threatening to lift his injunction if the holdouts failed to negotiate in good faith.

However much the settlements may help Argentina, the rewards for the vultures are gobsmacking. It is impossible to say with precision how much each is making, because the depressed prices at which they bought the bonds are not publicly disclosed. But Singer, he vulture-in-chief (his firm was lead plaintiff in the case), stands to collect $2.4 billion—a gain of about 10 to 15 times his firm’s original investment, according to the Wall Street Journal. Even for those who are ending up with less, the returns are hardly shabby.

It’s all well and good to celebrate this outcome as Argentina finally closing a sorry episode in its history, and dismiss the vultures’ bonanza as a bitter pill that Buenos Aires must swallow for the sake of improving its economic fortunes. But an appalling precedent has been set.

The next time a country needs to ask private creditors for a significant amount of debt relief, market participants will remember how spectacularly lucrative it was for Singer et al to hold out against Argentina’s original deal. They will ask themselves why anybody should settle for some write-down of their claims rather than pursue litigation for full payment. And they will feel emboldened by the knowledge that a court ruling in a very important jurisdiction could be used to enforce their demands. As Anna Gelpern, a Georgetown Law School professor who specializes in sovereign debt issues, wrote last week, “the [Argentine] case has produced and tested an immensely potent weapon that a small minority of creditors can now use to hold countries and the rest of their creditors hostage.”

The upshot is a worsening of a system that was already deeply flawed. Countries sometimes find themselves owing more to creditors than they can reasonably afford to pay—perhaps because of their own irresponsibility, perhaps because of bad luck, perhaps because of a combination of the two. Yet at the international level, there is no equivalent to the domestic bankruptcy laws that apply to individuals and companies. Whereas those domestic laws properly recognize the necessity of forcing all creditors to accept less than the full amount of their contractual rights, so that debtors can get a second chance while creditors receive equitable treatment, countries operate in a much wilder and woollier legal environment. Argentina’s tale shows how unjust, and inimical to public interest, the system is becoming.

The vultures and their apologists insist that the hard-nosed tactics of creditors like Singer and Dart are broadly beneficial—a classic case of greed being good. According to this view, the vultures help force countries to abide by the rule of law and honor debt obligations in accord with contractual terms. That in turn leads to more capital flowing where it is needed, and discourages the recipients from using that capital irresponsibly.

This argument is valid up to a point, but it is based on the same pro-creditor fundamentalism as the case for debtors’ prisons. As important as contractual rights are, they shouldn’t be sacrosanct in sovereign debt situations any more than they are in cases of individuals or companies. Moreover, there is no evidence that officials of debtor countries are disposed to renege on their obligations; if anything, the biggest problem with such countries is that they are too reluctant to seek debt relief. It is a well-established financial truth that serious debt problems, left unaddressed, almost invariably burgeon, so if losses are inevitable it is better to take them sooner rather than later. As a 2013 IMF paper noted, policymakers typically wait too long to face the reality that a country’s debt is unsustainable, and when they finally do, they don’t go far enough in addressing it. The result is that “debt restructurings have often been too little and too late.” This was one of the lessons of Argentina, where the impact of default was all the worse because of costly efforts to stave it off—and it was also one of the lessons of the Greek crisis.

Perhaps, as some argue, the Argentine case will turn out to be an isolated example of a country that got its just deserts in court for the way it stiffed creditors after its default. It’s true that the bondholder representatives who tried negotiating a settlement with Buenos Aires in the wake of the country’s collapse felt they were treated rudely, and the Argentine offer in 2005 was a take-it-or-leave it deal—with the explicit threat that holdouts would get nothing. So one possible consequence of this whole episode is that debtor countries will adopt more reasonable, less intransigent stances with their creditors, and mutually-satisfactory compromises will result.

But it would be Pollyannish to bet that events will take such a benign turn. After all, the most litigious bondholders cashed in big-time on Argentina, while non-litigious ones understandably feel they were played for suckers. Professional investors are not known for blithely forgoing chances to rake in enormous payoffs; this is why the odds have greatly increased that future Argentine and Greek-style crises will be even harder to resolve and more prolonged than they are already.

To anyone who isn’t 1) a wild-eyed zealot for bondholder rights, 2) a nostalgia buff for debtors’ prisons, or 3) an investor in a vulture fund, it should be clear that the international framework for sovereign debt is imbalanced way too far in favor of the Darts and Singers of the world, and against countries that genuinely need debt restructuring. The only question is the extent to which power should be rebalanced.

One heartening development is a 2014 initiative among financial industry leaders, governments and the IMF to promote the use of new types of bonds, called “Super CACs,” (the acronym stands for “collective action clause”). These bonds are legally fortified to force all of a country’s creditors into a restructuring if a heavy majority goes along. But Super CACs are no panacea, because global markets are still full of old-style, vulture-prone bonds.

Economists and legal experts have proposed an abundance of good ideas, ranging from the sensibly practical to the daringly ambitious. My favorite is the creation of a new type of IMF lending instrument called a “Sovereign Debt Adjustment Facility.” (SDAF), which would have some of the features of an international bankruptcy regime, and would deal with both the holdout problem and the “too little too late” problem. The IMF itself proposed a more far-reaching scheme in 2001, but it went nowhere.

Alas, the prospects for major reform of the SDAF type are bleak, not least because financial interests will marshall powerful opposition. So there may be no more need to cry for Argentina, but the shedding of tears may well be in order before long for a country in similarly dire straits.

Paul Blustein, a journalist and author, is a Senior Fellow at the Centre for International Governance Innovation. He spent most of his career at the Washington Post and Wall Street Journal. His books include And the Money Kept Rolling In (And Out): Wall Street, the IMF, and the Bankrupting of Argentina.

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10. HOW NOT TO FIX ARGENTINA’S INFLATION PROBLEM (PanAm Post)
March 16, 2016

When it Comes to the Economy, Not All Advice is Good Advice

In a world where high inflation is no longer a problem, Argentina’s inflation is still the population’s main concern. Only Spain and Venezuela show inflation rates above 20%, with the principle concern being that this trend has continued for more than ten years.

For this reason, and in parallel with the completion of the new government’s first three months, the Buenos Aires economic newspaper El Cronista Comercial asked expert analysts to offer their opinion and advice on how to lower inflation.

While among this analysts we can find accurate points of view related to budgetary imbalance and uncontrolled monetary emissions that deteriorate the currency’s purchasing power, the fact remains that among their “advice” are lots of misdiagnoses, followed by absurd proposals.

Economist Augustine D’Atellis, a member of the “GraN MaKro” group (N and K are capitalized in honor of former Argentine President Nestor Kirchner), suggested that:

“… Market freedom in price formation leads to increasing inflationary dynamics, to the detriment of the wages’ purchasing power.”

But this statement is clearly false. In the table below you can see the world’s economically freest countries. That is, those where D’Atellis said the free market “forms prices.”

Screen-Shot-2016-03-14-at-9.03.10-AM
What his “analysis” recommended is the opposite of true. Where there is a free market, inflation is not high, but considerably reduced — with an annual average of 1.8 percent. That is, no less than 94 percent lower than what Argentina had in the same year.

Therefore, inflation has nothing to do with the free market.

Another person who gave his opinion was public accountant, congressman and former Economic Policy Secretary Roberto Feletti.

“The effective anti-inflationary policy is one that combines market regulation, essentially in those monopolistic supplied goods and rigid demand, and with price and wage agreements,” he said.

The problem with this analysis is that it confuses inflation with the high prices placed by a company. That is, if a monopoly sets a price of US $100 for its product, but that price is kept for 10 years, does it really have to do with inflation? Since it is a monopoly, we can probably agree the price will be high, but high prices are not the same as inflation, so price control over monopolies is by no means an “anti-inflationary policy.”

Mercedes Marco del Pont, former President of the Argentina Central Bank between 2010 and 2013, said “the Central Bank’s decision to minimize interventions [in the foreign exchange market] in order to promote the free float does not seem consistent with its objective of controlling inflation.”

According to this view, a type of free trade and market defined by the Central Bank with inflation-targeting is a bad idea. However, it is what a lot of countries in the region such as Peru, Colombia, Chile and even Brazil have done.

In all these countries, the monetary authority left the exchange rate float. And to the surprise of Marco del Pont, they hold a free exchange rate with very low inflation compared to that of Argentina or Venezuela, who opted for exchange control as an anti-inflationary strategy.

Misdiagnoses as to the inflationary phenomenon abound in our country. The fault falls on business traders, the free market or the the dollar. Elements such as an overwhelming public spending or frenzied monetary emission should never be part of these specialist analyses.

No wonder, then, that, in providing answers, they advise to do everything that has already failed on multiple occasions in the past.

That leaves us with one thing to make clear: if we follow their prescriptions, we will repeat past mistakes and, even worse, not lower inflation. The best thing the new government can do is turn a deaf ear to such recommendations.

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11. HOW ECONOMIC FREEDOM CAN BE RESTORED IN ARGENTINA (The Heritage Foundation)
By James M. Roberts and George A. Margulies
March 17, 2016

Argentina ranked 169th of 178 countries in the 2016 Index of Economic Freedom, one of the worst performances in the world. That is a tragedy for the hard-working Argentine population. Steep declines have been registered in all of the country’s economic freedom indicators, including control of government spending, labor freedom, and business freedom. Argentina is mired in a climate of corruption and economic repression.

Severely hampered by state interference, the formal economy has grown increasingly stagnant as informal economic activity expands. Monetary stability is particularly weak and, despite extensive price controls on almost all goods and services, actual rates of inflation have surged. Argentina’s investment profile has been badly damaged by monetary and fiscal mismanagement, rising protectionism, and expropriations during the Kirchner years. The 2001 sovereign debt default remains unresolved, economic growth has weakened, and poverty has increased. Capital controls have spurred capital flight.

Argentina’s new president, Mauricio Macri from the pro-free-market political opposition, took office on December 10, 2015. This Heritage Foundation Special Report explains how Argentina lost so much economic freedom—and what the new government can do to restore it. A good start will be to correct the many mistakes made by the previous government.

Argentina’s economic freedom score in the 2016 Index of Economic Freedom—43.8 out of 100, its lowest score ever—placed it in 169th place of 178 countries measured.[1] Argentina also ranks near the bottom (27th) of the 29 countries in the South and Central America/Caribbean region. That is a stunning decline from its highest score of 74.7, which was recorded in the second edition of the Index in 1996.[2]

Since then, it has been downhill for Argentina. Steep declines have been registered in all 10 of the country’s economic freedom indicators, including control of government spending, labor freedom, and business freedom. Argentina continues to be mired in a climate of corruption and economic repression. Severely hampered by state interference, the formal economy has grown increasingly stagnant as informal economic activity expands. Monetary stability is particularly weak and, despite extensive price controls on almost all goods and services, the Economist Intelligence Unit reported that inflation surged to 40 percent in 2014[3] (although the Kirchner administration repeatedly underreported it via the official Argentine statistics agency INDEC— El Instituto Nacional de Estadística y Censos de la República). Government interference in the financial sector further distorts price levels. In the past decade alone, Argentina’s economic freedom score has dropped by nearly 10 points, plunging the economy into the lowest—“repressed”—category of the Index.

President Cristina Fernández de Kirchner of the Peronist Party, elected in 2007, re-elected in 2011, and preceded in office by her late husband Néstor, was constitutionally barred from seeking a third term. Argentina’s investment profile was badly damaged by monetary and fiscal mismanagement, rising protectionism, and expropriations during the Kirchner years. The 2001 sovereign debt default remains unresolved, and a U.S. court decision in favor of “holdouts” who did not accept previous restructuring offers sent the country into default again in 2014. Economic growth weakened, and the poverty rate increased. Capital controls spurred capital flight.

http://www.heritage.org/~/media/infographics/2016/03/sr179/sr-argentina-economic-freedom-chart-1-825.ashx

Formerly the mayor of Buenos Aires, Mauricio Macri of the pro-free-market Cambiemos opposition coalition, won the 2015 presidential election because the Argentine public was fed up with the populism and poor performance of the Kirchner government. This Special Report explains how Argentina lost so much economic freedom—and what the Macri government can do to restore it. A good start will be to correct the many mistakes made by the Kirchners.

A History of Political Instability

Between 1880 and 1930, Argentina was one of the wealthiest nations in the world. Today, despite having the world’s 23rd-largest economy as ranked in 2014 by gross domestic product (GDP),[4] Argentina is confronted with many challenges, including the continuing rise in inflation that creates difficulty in attracting investors, a history of corruption, political uncertainty, debt defaults, and the nationalization of companies.

Argentina has vast natural resources, with over 375,000 square kilometers of arable land,[5] significant gas and petroleum reserves, as well as sizable mineral deposits.[6] Literacy is nearly universal.[7] The United Nations Human Development Index, which measures education, life expectancy, and wealth, ranks Argentina 49th of 187 countries in the world.[8] These advantages, coupled with Argentina’s youthful demographic (see Chart 2), would seem to make it an optimal destination for foreign direct investment (FDI).

Yet, Argentina’s economic performance has been inconsistent. (See Chart 3.)[9] Argentina’s political history has swung between periods of constitutional democracy and military dictatorships. In 1943, a military coup led by Colonel Juan Domingo Perón ousted the constitutionally elected government.

Perón, an early admirer of fascism, was elected president in 1946 based on his promises of higher wages and social benefits. Under Perón, presidential powers were increased and news media were suppressed.[10] Ironically, in September 1955, another military coup forced him into exile. In subsequent years, multiple administrations attempted to deal with a deteriorating economy and social upheaval. In 1973, Perón was again elected president, but he died the following year. He was succeeded by his third wife, Isabel, who was subsequently ousted in 1976 by a military coup led by Jorge Rafael Videla, who ruled until 1981 and was succeeded by other military dictators until 1983. Videla’s reign was marked by serious abuses during the so-called Dirty War, including disappearances and torture.

In a desperate attempt to survive politically, the military junta launched an ill-advised war in 1982 against Great Britain over control of the Falkland Islands. After a decisive victory for the British, then-President Leopoldo Galtieri was removed from power, setting the stage for a transition to democracy.[12]

The election of Raúl Alfonsín, who succeeded Galtieri in 1983, marked the first time that Peronism was defeated in a free election. Alfonsín put the former dictators on trial and set up a commission to look into the violence and repression of the 1970s. These trials were halted, however, after several coup attempts. Hyperinflation related to ongoing political instability soon followed, and Alfonsín was ejected from office just five months shy of completing his term.[13] In fact, neither of the non-Peronist elected presidents of Argentina has been permitted to serve a full term in office.[14]

Stunted Economic Development

Alfonsín was succeeded by a Peronist—Carlos Menem—who implemented a neo-liberal and market-friendly reform program. When he entered office in 1989, Menem initiated a program to privatize many state enterprises and to liberalize trade. In 1990, the economy experienced inflationary episodes. Menem responded with the Convertibility Plan of 1991. This plan simplified the tax code, enforced it better, and established an independent central bank; it also liberalized markets and encouraged privatization. Later, these reforms expanded to include pension reform, privatization of some provincial banks, and the creation of greater flexibility of the labor market.[15]

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The most dramatic and consequential of Menem’s reforms, the Convertibility Law, fixed the exchange rate between the Argentine peso and the U.S. dollar at one-to-one. Initially, the peg was tremendously successful, greatly reducing Argentina’s very high inflation rate and stimulating growth. However, as budget deficits and sovereign debt rose, Argentina also began running a trade deficit. Eventually these factors, combined with an over-valued and steadily appreciating dollar-pegged peso, resulted in a severe decline in exports that were no longer priced competitively for global markets. Meanwhile, neighboring Brazil had devalued its “real” currency in response to the Asian financial crisis of 1997.[16 ]That had the effect of increasing Brazilian exports, including to Argentina.[17]

After Menem’s relatively successful tenure, there followed a series of presidents who had to navigate these increasingly choppy financial waters. The economic storm crested in late 2001, when President Adolfo Rodríguez Saá announced that Argentina would default on its debt. Saá was forced to resign and his successor, Eduardo Duhalde, ended the peso–dollar parity. In 2003, Néstor Kirchner was elected president with just 22 percent of the popular vote.[18] Term limited, Néstor was succeeded in 2007 by his wife, Cristina, who dominated Argentine politics after Néstor’s early death from a heart attack.

http://www.heritage.org/~/media/infographics/2016/03/sr179/sr-argentina-economic-freedom-chart-3-825.ashx

Growing Hostility to Western Values and Neoliberal Economics

Under President Cristina Fernández de Kirchner, Argentina strengthened ties to governments in the region that are hostile to Western values and again challenged the right to self-determination of citizens of the Falkland Islands. The government’s seizure of nearly $30 billion in private pension funds in 2008, its failure to settle with a small group of “hold-out” creditors from the 2001 default, and its 2012 expropriation of Yacimientos Petrolíferos Fiscales (YPF), a subsidiary of Spanish oil company Repsol, all severely damaged Argentina’s investment profile. In addition, Kirchner’s centrally planned economic policies removed the independence of the central bank.[19]

A Lack of Economic Freedom. Argentina today is mired in a climate of economic repression. Severely hampered by state interference, the formal economy has stagnated and informal economic activity has expanded. Monetary stability has been particularly weak, and extensive price controls have been imposed on almost all goods and services. Government interference in the financial sector has further distorted price levels.

Weak Rule of Law

Argentina’s scores on the Index of Economic Freedom’s Rule of Law indicators have been in a steady decline for more than a decade due to the increasing levels of corruption and attacks on private property rights that have accompanied growing state interference in the economy.

Transparency International ranked Argentina 107th of 175 countries in its 2014 Corruption Perception Index (see Chart 4),[20] which reported that the country’s judicial system is increasingly vulnerable to political interference and that corruption is prevalent.

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Not surprisingly, public confidence in the government and the judiciary reached record lows during the Kirchner years. Endemic corruption in Argentina’s government and business climates became a major concern for the Argentine people and foreign investors, and figured large in the Macri victory. Between 1995 and 2013, polls indicate a 40 percent increase in perceived corruption. (See Chart 5.)[22]

It is not hard to understand why the public became so jaded. While instances of corruption abound, here are some of the most notorious recent examples: In January 2015, Argentine federal prosecutor Alberto Nisman was found dead the day before he was to testify about official corruption.[23] According to press reports, businessman Lázaro Báez and others were allegedly involved in a scheme with President Néstor Kirchner to funnel money out of Argentina.[24] Fashion designer Ralph Lauren admitted to paying bribes to Argentine officials between 2005 and 2009 to expedite the importation and customs clearance of his products.[25] Aerolíneas Argentinas, the national airline, paid $4.3 million over list price for each of the 20 Embraer E-190 aircraft it purchased. The airline claimed that the price included spare parts and pilot training,[26] but suspicions of bribery abound because airlines typically pay below list price for aircraft.[27]

External influences, such as narco-trafficking, have also negatively affected economic freedom. Argentina’s porous borders make it an attractive waystation for criminals transporting drugs to Europe. The fact that Argentines enjoy the right to visa-free travel to the European Union and many hold European passports facilitates these crimes, which are on the rise. Narco-traffickers even “infiltrated law enforcement agencies, politics and the judiciary,”[28] and the Kirchner government’s response was feeble.[29]

Instead of taking steps to strengthen the rule of law, in 2013 the Kirchner government rammed legislation through the Argentine congress that weakened the judiciary, which was already vulnerable to corruption. While supreme court justices are appointed by the president with the consent of the senate,[30] under the 2013 law, the executive branch gained more influence through a new provision to mandate election of provincial judges.

Protection of intellectual property rights—copyrights, trademarks, and patents—has also been problematic. Since 1996, for example, Argentina has been on the U.S. Trade Representative’s intellectual property rights (IPR) “Special 301” Sanctions Priority Watch List, which is an annual review of the state of IPR protection and enforcement among U.S. trading partners worldwide.[31]

Government Too Big

According to International Monetary Fund (IMF) data, annual government spending consumes more than 40 percent of GDP,[32] and public debt currently also amounts to nearly 40 percent of the economy.[53] To pay for this spending the government gobbled up more than one-third of GDP. Taxation in Argentina is high and is biased against private business and the poor. The top individual and corporate tax rates are 35 percent. Other taxes include a value-added tax, a wealth tax, and a tax on financial transactions.

While Argentina ostensibly has a progressive tax structure, distortions within the tax code ultimately create a regressive tax system due to a mismatch in deductions and marginal tax rates, aggravated by the government’s intentionally false consumer price index statistics.[34]

There are a number of ways the next government can reform the tax system but, perhaps the best, would be to adopt a flat tax. While multiple variations of the flat tax have been proposed, each recommends the following: a single, low rate on personal and business income, no taxation on death or savings, immediate expensing of business investments, and the removal of unwarranted credits, deductions, and exemptions.

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Doing Business: Increasing Difficulty

Regulatory encroachment on private businesses increased under the Kirchners, with government interference discouraging entrepreneurship and raising regulatory uncertainty. The government regulates the prices of electricity, water, and gasoline, and brings pressure to bear on private companies to fix prices and wages.

It takes 14 bureaucratic procedures and 25 days to open a business in Argentina.[35] Next door in Chile, the comparable figures are seven procedures, and five and a half days.[36] Not coincidentally, Chile has the highest level of economic freedom in Latin America.[37]

Rigid and ineffective bureaucracy complicates the task of starting a business. The necessary steps and time frame for approval, illustrated by Table 1, are greater than the Organization for Economic Cooperation and Development (OECD) average. Obtaining construction permits can take a year; obtaining electricity service can take 30 days. These state-imposed burdens add additional costs to doing business in Argentina that can deter a potential entrepreneur.[38]

Closing a business is even harder, given the complex Argentine bankruptcy procedures. According to the World Bank’s “Ease of Doing Business in Argentina” report, it takes an average of nearly three years to navigate the country’s bankruptcy proceedings, and typically costs 12 percent of the value of the estate to do so. The average recovery rate for the typical failed business in Argentina is only about 29 percent of pre-bankruptcy asset levels.[39] As if the labyrinthine bankruptcy laws were not difficult enough, the problem is aggravated by the absence of specifically designated courts for bankruptcy and reorganization hearings.[40]

Rocky Labor Relation and Crippling Strikes

The labor market lacks flexibility, and a rising mandated minimum wage has driven more economic activity into the informal sector.

Notwithstanding the crucial role of organized labor in the Peronist coalition, since 2011 (when wage caps were imposed to try to control inflation), the Kirchner government’s relationship with labor became increasingly strained. In 2012, trade unions opposing Kirchner’s economic policies called strikes that created transportation bottlenecks and hindered grain exports.[41] In April 2014, a general strike crippled the economy, shutting down all transportation, many businesses, schools, some hospitals, and sanitation.[42] Strikes have continued: June 2015 saw a 24-hour walkout by its transport unions. The second such strike in three months,[43] it affected the entire transport sector, as well as solid waste collection, forcing many schools and businesses to close.

Flawed Monetary Policies

Another area of concern, and one where the rule of law has palpably weakened in Argentina, was exemplified by the Kirchner government’s decision in 2012 to take direct control of the formerly independent central bank.[44] It is vitally important for the health of any country’s financial system that the central bank be immune from interventions by self-serving politicians who have their own short-term interests in mind, not the long-term needs of the country.

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The Kirchner monetary policies created rampant inflation. The labor problems noted above are a direct result of this inflation. Unrelenting inflation threatens to consign many workers to the impoverished life of the “working poor.” An economy constantly under threat of wildcat strikes does not operate efficiently nor does it bode well for attracting FDI. The issue of wages not keeping pace with inflation must be addressed by the new president, because the inflation that has caused the value of the after-tax wages to lose purchasing power is a direct result of Kirchner’s erroneous policies.

Historically proudly independent, the Banco Central de la República Argentina’s (BCRA—Argentina’s central bank) primary mission had been to preserve the value of the country’s currency. Under Cristina Kirchner that changed in 2012, when its mission was restated “to promote, to the extent of its ability and in the framework of policies established by the national government, monetary stability, financial stability, jobs and economic growth with social fairness.”[45 ] Translated into Kirchnerista realpolitik that meant for all practical purposes that a political component was added to the BCRA’s mission allowing the government to establish direct access to central bank funds.

False Official Figures on the True Inflation Rate. Under Kirchner the official Argentine government statistics agency, the Instituto Nacional de Estadística y Censos (INDEC), deliberately and repeatedly underreported inflation, despite numerous warnings by the IMF not to do so. From 2007 to 2014, for example, private-sector economists estimated the actual inflation rate in Argentina as double or even triple the rate reported by the INDEC. (See Chart 6).[46] In February 2014, the INDEC attempted to obfuscate this under-reporting by announcing a new, “more credible” consumer price index.[47]

By manipulating official inflation statistics, the government significantly reduced the amount of coupon interest paid to its domestic bondholders, many of whom were forced to accept the new bonds as part of the debt-restructuring “haircut” imposed by the government in 2005.

Under the Kirchner governments, relations with the IMF, the world’s “lender of last resort,” became increasingly tense, with Argentina blaming the IMF for bad advice that led to the 2001 debt default (not entirely true),[48] and the IMF (accurately) accusing Argentina of misrepresenting economic and inflation data.[49]

Currency Controls, Black Markets, and Capital Flight. After decades of inflation, hyperinflation, and more inflation, Argentines have understandably become reluctant to hold pesos. When the government stopped pegging the peso to the dollar in January 2002, the peso’s purchasing power fell dramatically,[50] going from parity (one-to-one) to more than three-to-one within a year. In the years since, the peso has kept falling and now is at more than nine-to-one.

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In an attempt to prop up the peso and prevent additional foreign currency from leaving the country, Kirchner imposed a series of controls on foreign currency transactions, enacting more than 30 regulations since 2011. These included curtailing most foreign currency purchases, taxing Argentines on the estimated value of their foreign vacations and on Internet purchases, preventing foreign companies operating in Argentina from paying out dividends, and restricting imports[51] (which have meant higher input costs for import-dependent local companies). By 2013, facing a deteriorating balance of payments, the government imposed truly draconian bans on foreign-currency transactions to protect dwindling dollar reserves.

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Despite these measures, capital flight accelerated. A recent and telling example has been the purchase of U.S. real estate by Argentines to circumvent capital controls. Millie Sanchez, executive vice president for real estate developer Douglas Elliman Florida, reports that almost 50 percent of all new condominiums built in Miami are sold to Argentines.[52]

Trade Distortions. As the world’s third-largest producer of soybeans,[53] Argentina’s trade surplus was its sole positive economic indicator during the Kirchner years. Predictably, since it was cut off from global capital markets, the government tried to exploit the soybean windfall by imposing high export tariffs (taxes) on soybeans and other agricultural commodities to rebuild the country’s foreign exchange reserves. Soy and its derivatives bear the largest taxes, at rates around 35 percent, whereas wheat and corn are taxed at around 20 percent.[54] Additionally, limits were imposed on wheat exports to contain domestic prices,[55] and exporters were permitted to exchange dollars for pesos only at the official exchange rate.

Another flawed and trade-distorting policy the Kirchner administration imposed with the goal of preserving central bank reserves for its own political use was a government regulation requiring automobile importers to match the value of their imports with an equal value of exports. The importers were forced to adhere to the regulation by exporting agricultural products, which diverted them from their main business expertise.[56]

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Argentina’s average weighted tariff rate of 5.6 percent is not particularly high, but the government’s 21st-century version of the old “import-substitution” policy from the 1950s—a failed attempt to stimulate the economy by forcing the substitution of domestically manufactured products for similar imported products—has created onerous non-tariff barriers. Kirchner used the import-substitution policy periodically to ban imports on such products as French cheese, iPhones, Apple computers, BMW cars, and Barbie dolls. The government also used the policy to coerce companies to produce goods in Argentina. Some companies gave in, such as Research in Motion (now Blackberry) which, in July 2011, announced that it was partnering with Bright Star Corp. to assemble some of its devices in the Tierra del Fuego region (the Kirchners’ home area).[57]

Argentina’s most important trading partners are Brazil, China, and the United States. (See Chart 8.)[58 ]Its most important trade agreement, the Mercado Común del Cono Sur (Mercosur) of Argentina, Brazil, Paraguay, Uruguay, and Venezuela, was designed to promote the free movement of people, goods, and services between the member states, but has largely failed in that goal.[59] Mercosur has never fulfilled its potential because its two biggest members (Argentina and Brazil) clung stubbornly to the protectionist policies that MERCOSUR was supposed to mitigate. Nevertheless, Mercosur represents a potentially large market for Argentina, but it should be re-shaped along the lines of the more successful Pacific Alliance.[60] President Macri took an excellent first step to revitalize and reform Mercosur when he said on November 23, 2015, that he “would seek Venezuela’s suspension from regional Mercosur trade bloc over rights abuses committed by President Nicolás Maduro’s administration.”[61]

Hostile Investment Climate

Given Argentina’s track record, businesses and investors have developed well-grounded and rational fears of nationalization and loss of investment capital. Néstor Kirchner re-nationalized the postal service, and also nationalized a shipyard, the railways, a water company, and a mobile phone operator.[62] In 2008, $30 billion in private pensions were seized by the Cristina Kirchner government.[63] She also nationalized Aerolíneas Argentinas. Perhaps the most infamous re-nationalization in recent years was that of YPF, a formerly state-owned entity that had been privatized during President Menem’s liberalization reforms in the 1990s.

Argentina’s long history of nationalizations has hurt its climate for FDI. A common practice that countries with spotty track records have used to improve their FDI reputations has been to sign bilateral investment agreements (BIAs). These agreements provide a legal basis setting the terms by which nationalizations can occur and allow equal treatment of companies both inside and outside the country. Argentina has 58 BIAs, the majority having been signed in the 1990s under Menem.[64] Renegotiating them and seeking new ones may help improve Argentina’s reputation and attract more FDI.

The Way Forward

President Macri takes office in a country that has lost much of its economic freedom over the past decade by squandering its immense resources. His task, for the good of the people of Argentina, the region, and the world, will be to restore it. The following steps would help:
•Improve Argentina’s investment climate by re-establishing the rule of law through an aggressive campaign to root out corruption and re-establish an independent judiciary.
•Control inflation by implementing a coherent policy to limit the printing of money.
•Restore the independence of the central bank so that the new government can execute effective monetary policy.
•Resolve remaining issues connected to the 2001 default. With such a poor credit history, it might be advantageous for the next government of Argentina to issue short-term maturity debt and denominate it in U.S. dollars, a strategy that could allay investor fears.
•Streamline the regulatory structure to encourage private business formation and overhaul antiquated bankruptcy laws.
•Institute a flat tax and lower the 35 percent flat tax on businesses.
•Eliminate export taxes on soybeans and other agricultural commodities to generate increased exports of more competitively priced products.

Conclusion

Argentina’s new president inherits a system of political instability and restrictive policies that has hindered economic growth. The downfall of Argentina, once a great and wealthy country, began under Juan Perón; the Kirchners merely perfected the damage.

As noted economist and Argentina native Dr. Alejandro Chafuen has written, it was Perón who put Argentina on “the road to decay” by implementing fascism, “one of the most powerful collectivist doctrines of the 20th century,” which was based on “government-based economic management” that “devastated the economic culture and rule of law.”[65]

President Macri must bury Perónism once and for all, and announce the advent of a new day for Argentina, a day when everyone can get back on the road to market-based democratic principles, economic freedom, and prosperity.

—James M. Roberts is Research Fellow for Economic Freedom and Growth in the Center for Trade and Economics, of the Institute for Economic Freedom and Opportunity, at The Heritage Foundation. George A. Margulies, a former member of the Young Leaders program at The Heritage Foundation, is a student at New York University’s Leonard N. Stern School of Business. Theodore Ellis and Nicholas Hoffman, current members of the Young Leaders program, made valuable contributions to this paper.

12. ARGENTINE PRESIDENT: WE WILL “MAKE HEADWAY” WITH AMIA INVESTIGATION (The Tower Org)
By TheTower.org Staff
03.17.16

Newly-elected Argentine President Mauricio Macri said that his government is determined to “make headway” into the investigation of the 1994 AMIA Jewish center bombing in Buenos Aires, the Jewish Telegraphic Agency reported on Wednesday.

“We are fully committed to contribute in any way we can to make headway with this investigation,” Macri declared. “Here, we suffer the ravaging consequences of two bomb attacks. We are still in the dark of what happened.” The second attack Macri referred to was the 1992 bombing of the Israeli embassy in Buenos Aires. The Argentine president also pointed out that his government abandoned an agreement signed by the previous administration to jointly investigate the AMIA bombing with Iran, the main suspect in the case. A court found the accord to be unconstitutional.

Macri, whose election last year was considered a setback to Iranian ambitions in Latin America, made the comments at the Plenary Assembly of the World Jewish Congress (WJC), which is being held this year in Argentina. He further spoke of the historic ties between Israel and Argentina, noting that he met with Israeli Prime Minister Benjamin Netanyahu at the World Economic Forum in January. On that occasion, Macri said he told Netanyahu that “we want to boost our relationship in order for us to work closer than ever in order to defend peace throughout the world.”

Delegates from the WJC are to participate in a commemoration marking the 24th anniversary of the Israeli embassy bombing on Thursday.

Argentine prosecutor Alberto Nisman, who had investigated the ties between Iran and the AMIA bombing, as well as a cover up by the previous Argentine government of Iran’s role in the attack, was found dead with a bullet wound to the head last January. His death came hours before he was scheduled to present his findings to a closed session of the Argentine Congress. Prosecutor Ricardo Sáenz concluded late last month that Nisman was murdered and recommended that the investigation into his death be referred to a federal court. A three judge panel is to rule on his recommendation Friday.

Eamonn MacDonagh, contributing editor to The Tower, has written extensively on the Nisman case. In Alberto Nisman’s Secret Recordings, Revealed, which was published in the July 2015 issue of The Tower Magazine, MacDonagh exposed some of the back channel dealings between the Argentine government’s representatives and Iranian interlocutors.

13. HAS ARGENTINA ENTERED THE ‘WAR ON DRUGS’? (Open Democracy)
By Manuel Tufró and Paula Litvachky
18 March 2016

One of the dangers of the new government’s anti-drugs measures is that they enable military intervention in matters of domestic security, a path that once taken, is hard to reverse.

December 2015 brought a change of government to Argentina. Since the election campaign, the new authorities have declared drug trafficking to be the most severe problem affecting the country. They have stirred up arguments rooted in fear – the dangers of becoming another ‘Colombia’ or ‘Mexico’ – but without offering any definite diagnosis as to the forms of drug trafficking or the magnitude of its impact on Argentine society.

Upon taking power, the current government carried on with its escalating discourse, referring to a ‘paradigm shift’ in drug policy. The measures announced show a realignment of the country on the map of world debate with regard to drug-related problems and drug trafficking. The previous government had implemented vacillating policies, which combined support for progressive-minded positions in international arenas with erratic measures on the domestic front. The new administration seems to have begun to address these inconsistencies in the worst way, marking Argentina’s entry into the ‘war on drugs’.

Internationally, the economic, institutional and humanitarian consequences of this ‘war’ have mobilised an increasingly important bloc of actors who assert the need to abandon this paradigm and explore new forms of state regulation of these markets, along with policies that apply the perspective of harm reduction when it comes to problems of violence, instead of inciting yet more of it through the criminal justice system and militarisation.

In regional and international debates before 2015, Argentina stood by the countries that advocated further discussion of the effectiveness of the ‘war on drugs’ paradigm. The new government has begun to abandon that position, through regulatory decisions and an ever more explicit rapprochement with the United States, the main proponent of the war-like approach to drugs. At the same time, domestically, a fear campaign built around the growing problem of drug trafficking over the past two years has silenced incipient debates on the decriminalisation of consumption.

Argentine academics and experts on drugs, members of the “Grupo Convergencia”, published a document in 2015, “Drogas: una initiative para el debate” (Drugs: a debate initiative), in which they point out: “At present, Argentina does not have a comprehensive diagnosis of the drug phenomenon. By comprehensive diagnosis, we mean the existence and availability at all state levels of exhaustive, systematic and updated institutional knowledge of the drug phenomenon. This is not the case in our country where, unfortunately, presumption, intuition and improvisation have prevailed.”

But what is known for certain is that in recent years, the policies deployed against drug trafficking, by way of action or omission, have conspired to strengthen two of the most negative aspects associated with criminal networks, and not exclusively in the case of drug trafficking: institutional penetration, or the collusion or involvement of public, judicial and police officials in these networks; and the cycle of violence in poor neighbourhoods. The new authorities have not included these issues among their priorities.

‘New threats’ as justification for military intervention

One of the main risks of the new approach being adopted in Argentina is that it opens the door to military intervention in matters of domestic security, a path that once taken, is hard to reverse.

The examples of Mexico and Colombia are extreme cases that nevertheless highlight the fact that direct intervention by the armed forces in actions against drug trafficking or other forms of crime has grave consequences in terms of increased violence, massive human rights violations, and the de-professionalisation and corruption of military structures. At the same time, progress toward the dismantling of markets and criminal organisations has been little to none.

In contrast to various other countries in the region, in Argentina, the distinction between domestic security and foreign defence has been upheld since the return of democracy in 1983, although during the 1990s there were attempts to involve the armed forces in the fight against drug trafficking. Military resources were mobilised as of 2013 to provide logistical support to border control, with the ‘advance of drug trafficking’ as the underlying argument.

The new government took a qualitative leap in this same direction: on 22 January 2016, a presidential decree declared a “security emergency” for the entire country. Among other things, the decree characterises drug trafficking as a “threat to national sovereignty” in that it is a crime that may have transnational connections, even when other transnational crimes do not receive the same treatment. Characterising drug trafficking as a “threat to national sovereignty” places it in a grey area somewhere between domestic security (the field of action of police and security forces) and defence (within the scope of the armed forces). The decree thus brings about a substantive change in that it authorises direct intervention by the military – in this case the air force – to shoot down planes that resist identification (or cannot be identified).

The measure also implies explicit alignment with the doctrine of ‘new threats’ and, more generally, with the areas of work envisioned by different US agencies that advocate the armed forces’ participation in internal security. This approach can be observed, for example, in the appointment of a former head of the Buenos Aires Provincial Police’s Drug Division as the new chief for the entire provincial police force (which is the largest in the country); according to news reports, he was recommended by the US Drug Enforcement Administration (DEA). It can also be seen in the trip that security minister Patricia Bullrich made, along with other officials, to the United States at the end of February, where they met with officials from the US Department of State, the DEA and FBI, among others, for technical advice on interventions and weapons.

Other forms of militarization

Another regional trend indicates that the fight against organised crime has served as an alibi for other forms of militarisation of domestic security. For instance, the adoption by police and other security forces of military equipment and tactics. This phenomenon has reached the United States, where the federal government equipped police with weapons, vehicles and other items used by the military in the wars in Iraq and Afghanistan, and trained their security forces in military tactics. All of this has been used in the context of the war on drugs, essentially against the black population, according to a report by the American Civil Liberties Union (ACLU), “War Comes Home: The Excessive Militarization of American Policing”.

This militarisation of the police exceeds the matter of the war on drugs and has consequences for fundamental aspects of democratic life, such as the right to protest. The episodes in Ferguson, Missouri showed the world how military uniforms, weapons and vehicles are used as part of extremely aggressive tactics to control and repress public protests.

In Latin America, this phenomenon builds on historic patterns of police militarisation, inherited mainly from the dictatorships, but also combined with seemingly contradictory trends, such as neighbourhood or community policing. These forces, at least on paper, should adopt methods of action that insert police into communities and move away from militarised models of territorial control. A clear example of these opposing trends are the Police Pacification Units (UPP) used in Rio de Janeiro since 2008, a policy aimed at regaining control of some favelas, or shantytowns. The neighbourhoods are invaded by heavily armed elite corps or, in some cases, by the armed forces, to then install police forces supposedly trained in community techniques. The apparent initial success of the programme has been tainted, however, by the serious claims of police violence toward shantytown inhabitants in recent months.

In Argentina, although levels of police militarisation are lower, the trend in recent years has not been wholly absent. The province of Córdoba has a heavily armed police force called the Department of Territorial Occupation that, since its creation, has used deployment tactics that reflect a military indoctrination which envisions poor neighbourhoods as enemy territory to be occupied and controlled. During the previous government, this trend gained ground through the use of the national gendarmerie, an intermediate militarised force, to patrol zones of urban conflict. And while interventions by the gendarmerie have proven less lethal than those of the actual police forces, this highlights other problematic aspects of the use of militarised forces in urban settings, such as the difficulties of coexisting with the inhabitants of these neighbourhoods, especially the young men, who the gendarmerie see as subjects to be disciplined.

Lack of oversight of police and judicial institutions

In the case of Argentina, the militarisation of domestic security in any aspect is an ineffective and disproportionate recipe for taking on the key problems associated with the activities of criminal networks, foremost of which is collusion on the part of different state agencies.

Institutional penetration is far below the levels seen in so-called ‘narco-states’; however, it is a phenomenon that allows different criminal networks to persist. Recent cases confirm this, such as the lawsuits brought against judicial officials or the scandals caused by police and politicians’ involvement in drug-trafficking networks.

The measures taken to date by the new government suggest that the official position is that the weaknesses in prosecuting criminal networks are quantitative rather than qualitative. Therefore, more resources have been announced for the judicial branch, and new tribunals opened to alleviate the work of courts clogged with minor cases, but there has been no assessment of the structural problems in the justice system or the police forces that impede effective prosecution of the big players in drug trafficking and other illegal businesses.

The justice ministry recently announced a legislative package intended to facilitate the fight against organised crime. It is still too soon to know if these bills will be passed and implemented, or what impact they might have. Some seem to be aimed at intervention in the complex structures of criminality. However, there were no announcements as to underlying reforms to deal with the problem of police and judicial powers that function as key mechanisms in illegal markets.

At the same time, other troubling measures have been taken that cast doubt on the true intentions of the government’s fight against drug trafficking, such as the appointment to key positions in the anti-money laundering office (Financial Information Unit, or UIF) of lawyers who defend companies and banks accused of laundering funds.

Dangers of the new direction

Since the previous administration, drug policy and the pursuit of drug traffickers have been erratic, with a pronounced toughening of the criminal justice system in the last years of president Cristina Fernández’s second term (2011 to 2015). The new government has announced its alignment with the ‘war on drugs’ paradigm, the inefficacy of which has been demonstrated in several other countries. If this new direction gains strength, adverse effects can be expected in terms of violence, human rights violations and institutional functioning.

In the same way that prohibition leaves the market in the hands of drug traffickers, the war on drugs leaves the problem fundamentally in the hands of violent and corrupt police forces, and opens the possibility of military intervention. While criminal networks have an impact on institutional quality and on the quality of life of the poorest people, so do the anti-trafficking policies adopted and announced, because they are not aimed at the core of institutional collusion that allows these networks to exist. The real problems of violence in some areas thus remain hidden under the guise of an indefinite threat.

In this context, the prohibitionist paradigm is not being discussed, leaving debates to focus rather on how much to intensify punitive interventions against the narcos, minor dealers, traffickers, micro-traffickers and even consumers. This type of focus has proven to be ineffective in its objectives – which are the reduction of consumption and trafficking – whereas its negative impact on the spread of violence and on human rights has been documented throughout the region, as can be seen in this report compiled by 17 organizations, “The Impact of Drug Policy on Human Rights: The Experience in the Americas.”

Under a state of emergency and in a climate of fear-mongering, the problems associated with drug trafficking and drugs get muddled. They end up outside of the political debate, as part of a seemingly indisputable consensus that dictates the toughening of the criminal justice system, bolstering of police and, eventually, military intervention. The spaces for other voices to be heard are narrowing, voices that contend that there cannot be effective policies against organised crime without deep reforms of the police and security systems, and that the ‘drug problem’ should be approached from a standpoint of harm and violence reduction that tackles the mafia-like ways of regulating these markets that prohibition merely foments.

This article is published as part of an editorial partnership between openDemocracy and CELS, an Argentine human rights organisation with a broad agenda that includes advocating for drug policies respectful of human rights. The partnership coincides with the United Nations General Assembly Special Session (UNGASS) on drugs.

14. A SADIST IN A BENIGN PATRIARCH’S CLOTHING (The New York Times)
By A. O. SCOTT
18 March 2016

”The Clan,” Pablo Trapero’s wrenching, exciting new film, could be described as an examination of the banality of evil. It’s the story, closely based on actual events, of an ostentatiously normal family involved in crimes enabled by a climate of political violence and repression.

But the patriarch, Arquímedes Puccio, played with regal sang-froid and deadpan perversity by Guillermo Francella, is also a study in the evil of banality. His steadfast attachment to conformity and respectability is inseparable from his coldblooded, self-serving sadism. In his own mind, everything he does — the kidnappings, the beatings, the occasional murder — is an expression of his essential rectitude. He’s a good father, a good businessman, a paragon of petit-bourgeois virtue who happens to keep hostages tied up in the basement.

The pathology is not his alone. ”The Clan” takes place in Buenos Aires in the early 1980s, when Argentina was ruled by a military dictatorship that specialized in ”disappearing” its suspected political opponents. Arquímedes, though he is proud of his government connections (and adept at exploiting them), has neither an official position nor any particular ideological commitment. He’s in it for the money, selecting his prey based on the ransom he can collect. Rather than targeting supposed leftists, he and his accomplices — principally his son Alejandro (Peter Lanzani) — focus on members of their own class and social circle, including a young man who belongs to Alejandro’s rugby club.

One of Alejandro’s brothers leaves Argentina to escape the family business. Another, returning from a year abroad, is initiated into it. Their sisters and their mother are not expected to participate, and one of the questions Mr. Trapero raises is how much they know, or permit themselves to know, about what is happening under their noses. Mostly, they regard Arquímedes with deference and adoration, helping to fashion an image of the perfect traditional family. He helps his daughters with their homework, addresses his wife with chivalrous courtesy and strives to embody a Latin American version of a ”Leave It to Beaver” fatherly ideal. He’s a provider and a protector — stern, kind, capable and patient.

There is an element of grisly, grotesque comedy in the gap between who the Puccios — Arquímedes, above all — really are and who they pretend to be, and Mr. Trapero, whose other features include the intense prison drama ”Lion’s Den,” choreographs the contradictions of their domestic life with ferocious wit. ”The Clan” is partly a dark satire of the authoritarian personality, an appalling CT scan of male entitlement and middle-class vanity.

It is also a terrifically entertaining movie, which I don’t entirely mean as praise. Mr. Trapero’s energetic style, his almost gleeful juxtapositions of sex and violence and his exuberantly Scorsesean musical cues often pull against the gravity of the story. The period details are meticulous, and the shifting décor of the Puccio home provides a catalog of strenuously tasteful ’80s bad taste that may touch a nostalgic chord in middle-aged viewers. The kidnappings and ransom negotiations provide jolts of suspense, as does the larger narrative of Arquímedes’s unraveling ambitions. As Argentina inches toward democracy, he becomes more desperate and reckless; Alejandro’s doubts about his father grow; and an inevitable reckoning approaches, for the family and the nation alike.

Argentina awoke from the nightmare of dictatorship in 1983, and in the years since, in the midst of economic and political turmoil, its writers and filmmakers have grappled with the legacy of the ”dirty war.” Mr. Trapero has set out to examine the period from the perspective of the guilty, to explore the psychology of both the active collaborators with a brutal system and its passive beneficiaries. The cleverest and most troubling aspect of the film is its empathy.

Alejandro is such an appealing young man that we can’t help rooting for him. His father, though despicable, is also intriguing and charismatic, partly because of Mr. Francella’s commanding, disarmingly dignified performance. As fans of recent antihero-driven cable dramas know, it’s hard not to identify with a complicated protagonist, and Mr. Trapero exploits this habit of identification, ensnaring the audience, and maybe also the film itself, in an ethical trap. The violence is exciting, and its perpetrators are more interesting, more vivid and more real than the victims.

When I first saw ”The Clan,” at the Venice Film Festival last September, I was impressed by its insight and bothered by what I took as a certain glibness, a too-easy accommodation of moral horror to the imperatives of the thriller genre. On subsequent viewings, I’ve come to appreciate this ambiguity as part of what Mr. Trapero is trying to address, and as an essential aspect of what his film reveals about the nature of authoritarianism. Fascism is seductive not only because it feeds fantasies of power and greatness, but also because, at a primal, visceral, libidinal level, it can be a lot of fun.

”The Clan” is rated R (Under 17 requires accompanying parent or adult guardian). Civilization and barbarism. In Spanish with English subtitles. Running time: 1 hour 50 minutes.

15. ARGENTINIAN CRIME STORY (The Wall Street Journal)
By Tobias Grey
18 March 2016

The Notorious Case Behind A Hit Film

A movie about one of Argentina’s most notorious criminal cases — a seemingly upstanding Buenos Aires family with a clandestine sideline in kidnapping — has become a box-office phenomenon in the country.

“The Clan,” by director Pablo Trapero, which opens in the U.S. on March 18, has sold more than 2.6 million tickets in Argentina since August.

Set during the early-to-mid 1980s, when Argentina was moving from dictatorship to democracy, “The Clan” is about the affluent Puccio family, whose criminal double life shocked Argentines when it was exposed in 1985. The family kidnapped prosperous victims — usually the sons of prosperous local businessmen — and used the ransom money to build businesses such as a surf shop run by one Puccio son, Alejandro.

The 44-year-old director says “The Clan” is about “people looking the other way.”

The star is Argentine actor Guillermo Francella, best known in his homeland for comic roles and as a television performer. Mr. Francella, 61, plays Arquimedes Puccio, the silver-haired patriarch who died in 2013 on parole from a life prison sentence. Alejandro is played by Argentine actor Peter Lanzani.

“One of the reasons I cast Guillermo was because I wanted to play with the audience’s perception of him as an actor who is respected and loved for what he does by having him portray a monster,” Mr. Trapero said.

Both men decided to use Mr. Francella’s distinctive blue eyes to maximum effect by having him stare and pause before speaking. “I tried to search for ways of expressing the way the character’s mood could suddenly change from moments of pent-up anger to moments when he could be very sociable and charming,” Mr. Francella said.

The actor lived in the same Buenos Aires suburb of San Isidro as the Puccio family and often saw them around the neighborhood. “When the family was arrested [in 1985] I like many others thought that they were not guilty,” Mr. Francella said. “The father seemed like a nice person, the mother was a teacher, the children were of school age and very sports-driven with some of the boys playing rugby. So when they were found guilty it came as a shock.”

Mr. Francella’s view of the man he played has changed considerably since that time. “Now I don’t think Puccio had any moral scruples at all,” he said. “He used to go out shopping in the same car that he used for the kidnappings. He was extremely intelligent — like a jackal.”

Mr. Trapero’s screenplay, written with Julian Loyola and Esteban Student, focuses on the relationship between Arquimedes and his eldest son, Alejandro, who died of pneumonia in 2008 while on parole from a life prison sentence. Before his conviction, both in the film and in real life, Alejandro was hailed as a local hero because he played for the national rugby team.

In 2007, Mr. Trapero began to think about making a movie about the “Puccio clan,” as they came to be known in Argentina. But it wasn’t until 2014 that he managed to raise the movie’s roughly $5.5 million budget, after lining up a production partnership between an Argentine filmmaking company, Kramer & Sigman, and Spanish filmmaker Pedro Almodovar and his brother Agustin’s production company El Deseo.

“The Clan” is the eighth feature directed by Mr. Trapero, who was taken aback by the ghoulish sideshow his film inspired.

“I couldn’t believe that in the first few weeks after its release people were queuing up in front of the Puccio house in San Isidro to take selfies,” he said.

The director is preparing to shoot his first English-language movie this year — an adaptation of Mark Seal’s 2011 nonfiction book “The Man in the Rockefeller Suit” about a German who conned his way into working on Wall Street by posing as a scion of the famous American family. Again, it is a true story about a false facade of respectability. “Above all I’m interested not so much in the behavior of impostors themselves,” Mr. Trapero said, “but the people around them who have convinced themselves to believe something because it comforts them to believe it.”

16. PABLO TRAPERO ON TACKLING REAL-LIFE CRIME STORY BEHIND ‘THE CLAN’ (Variety)
By Jenelle Riley
17 March 2016

Filmmaker Pablo Trapero was a young boy in Argentina when he first heard the story of the Puccios, a seemingly normal family in Buenos Aires whom no one suspected had kidnapped and murdered several people during the 1980s. Now, 30 years later, Trapero has brought their story to the big screen with “The Clan,” starring Guillermo Francella as patriarch Arquímedes and Peter Lanzani as his son and reluctant collaborator, Alejandro. Trapero, whose previous films include the acclaimed “White Elephant,” won the Silver Lion for best director at last year’s Venice Film Festival for “The Clan.” The film went on to break box office records on its opening weekend in Argentina and opens this week in New York and Los Angeles after a worldwide festival run.

You were very young when the events in the movie took place; at what point did you start to think about telling the story onscreen? The first time I heard of it, I was only 13. But as you can imagine, it was not easy to forget. In 2007, I was finishing my movie “Lion’s Den” and started to think about making a movie based on the case. It stayed with me all this time.

Is the story still famous to people in Argentina? Yes and no. People from my generation, yes it was very famous. But when we started working on it, I realized that younger people were not that familiar with it. That was a big surprise.

What sort of research did you undertake for the movie? We spent a lot of time it the neighborhood, we talked with Alejandro’s friends, with all the people who had been around. We talked to the lawyers, the relatives of the family, the judges. We had to do all this to get the feel of what it was like inside that house.

How do the relatives feel about what happened? The son changed his last name and has nothing to do with them. We tried to reach out to (the immediate family) through friends, but they never wanted to talk to us. We talked with the families of the victims, which was exactly the opposite: they needed to talk to us, they needed to share what happened. They were very supportive.

I assume the families of the victims have seen the movie? Yes. Some came to the premiere in Argentina and it was really moving. Guillermo was present and it was very strange because they were hugging him, saying how great his performance was and how close it was to the real person.

Speaking of Guillermo, he’s so chilling in this film, but I understand he’s actually known for his comedic work back home? Yes. Not only a comedian, but a huge star in comedies. He can’t even walk down the street because people are shouting at him and wanting to take pictures. So it was a big challenge for both of us. I knew he was a great actor, but we wanted to see if he could be a villain. The first question I asked when we first met was, “Are you comfortable playing someone who’s such a real villain?” And he was very committed from the beginning. He actually said yes before we even had the final draft of the script done.

How did you know he could do it? I don’t know. I loved the idea of taking advantage of his popularity because it was similar to Arquímedes. He was respected and loved, and most of the people around their house were very skeptical about the news. They thought it was a mistake. So we tried to do that, have this nice, charming guy playing him. He was very cast against type. It was the same with Peter, who played Alejandro. He was cast after a long, long process. He used to be a teenage star on TV. This is his first movie.

This is one of those films that shows how truth is stranger than fiction; was there anything you had to leave out you would have liked to have included? So many things. Actually the criminal life of Arquímedes Puccio began in the late ’60s. He has a very long record and an amazing one. There were many things I had to leave out in order to focus on these four cases. We chose to focus on that one period which already had so much story in it.

What’s up next for you? Sleep. I’ve been promoting the movie. But next I’m supposed to do a movie here called “The Man in the Rockefeller Suit,” about this man (Christian Karl) Gerhartsreiter, who posed as a member of the Rockefeller family. It’s an amazing case and I’m really happy to be part of it. We’re working on a new draft and if things go right, I think we will be in production by the end of the year. It’s such an exciting project.

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ARGENTINE UPDATE – Mar 14, 2016

15 marzo, 2016

Minister floats policy shift

Sunday, March 13, 2016
House arrest for dictatorship criminals stirs controversy

By Luciana Bertoia
Herald Staff
Rights groups, prosecutors blast suggestion made by Avruj, say may imply impunity
The national government yesterday opened the door to granting house arrest to those convicted for dictatorship-era crimes who are over 70 years old, sparking a fresh controversy with human rights organizations.
“The decision has to be made by the courts considering every particular case,” said prosecutor Jorge Auat in response to the suggestion made by President Mauricio Macri’s Human Rights Secretary Claudio Avruj.
Avruj yesterday told daily La Nación that he believed those over 70 who are in jail for crimes against humanity should be granted house arrest if the courts believed so. Asked whether if it was his opinion or the government’s, Avruj said he believed it was the administration’s stance on the issue.
Avruj’s words were not welcomed by human rights activists who expressed fears that it would be a message of impunity on the eve of the 40th anniversary of the coup that marked the start of the last dictatorship.
Justice and Concord, the association that groups together lawyers representing dictatorship-era officials, celebrated Avruj’s words.
“Secretary Avruj said that those accused of ‘crimes against humanity’ who are over 70 should be granted house arrest. He agrees with the law. It is not to be dismissed,” Justice and Concord tweeted yesterday afternoon.
Avruj, for his part, repeatedly said that the government did not want to meddle with the courts but his words were seen as a message sent to the judges.
“Avruj’s statement should be considered as a whole. The government is giving the courts the green light to grant house arrest to repressors, which is what they have been demanding,” human rights lawyer Guadalupe Godoy told the Herald yesterday.
“Avruj does not object to the two demons theory and the government has been getting rid of human rights areas that could help to open new investigations into dictatorship-era crimes. Several relatives of those who have been in the dock have also been appointed by the government and the nominees to the Supreme Court have questioned the borrowing of rulings issued by international courts in human rights cases,” she added.
Days ago, human rights groups were also annoyed by the national government’s decision to allow convicted repressors to go back to military hospitals for treatment, backpedalling on a prior decision made by former president Cristina Fernández de Kirchner. In 2013, the Justice and Defence Ministries decided to ban repressors from being treated in military hospitals as a result of the escape of two former military officers from the Central Military Hospital in Buenos Aires City.
A dangerous stance
Auat, who heads the Attorney General’s Unit for Investigations into Crimes Against Humanity, made it clear that they do not object to house arrest as it is legally permissible. However, he expressed his concerns.
“House arrest cannot be used as a message of impunity,” Auat said. “This should be considered in times when trials seem to have slowed down,” he added.
“Granting house arrest does not mean that they are being released. It just means that a person should continue serving a sentence at home due to health reasons, for example,” he explained.
According to the prosecutor, the main problem is to guarantee that repressors do not break the restriction of not leaving their homes. However, several cases have been reported thus far.
In 2013, HIJOS — the association that groups together children of state terror victims — reported that Jorge Luis Magnacco — one of the medical doctors who operated at the infamous Navy Mechanics School (ESMA) and was linked to several baby-snatching cases — was shopping in Patio Bullrich commercial centre when he was expected to attend the trial that was being held at the Comodoro Py courthouse.
“In that case, we objected that Magnacco be granted house arrest, but we believe that every particular case should be analyzed,” Alan Iud, the head of the Grandmothers of Plaza de Mayo legal team told the Herald yesterday.
Legal considerations
Iud also explained that the law does not automatically authorize those above 70 to be granted house arrest.
“Age is one of the elements to be considered but not the only one,” the lawyer said.
“If a person is remanded in custody, the judge should consider whether there is a risk of escape or if he or she could interfere with an ongoing investigation,” Iud explained. “In case the person had already been convicted by a ruling confirmed by a higher tribunal, the judge should consider whether there is a risk of not serving the sentence,” he added.
“In La Plata, most judges took a more careful stance after Jorge Julio López was forcibly disappeared,” Godoy also explained. She was one of the lawyers who represent the survivor who acted as a witness and a plaintiff in the trial against former Buenos Aires provincial police deputy chief Miguel Osvaldo Etchecolatz, the first proceeding that took place after the reopening of the dictatorship-era investigations in 2006.
López was abducted on September 18, 2006, a day before Etchecolatz was convicted to life in jail by a federal oral court in La Plata. Plaintiffs have argued that Etchecolatz and sectors of the Buenos Aires provincial police had been behind López’s forced disappearance.
Still pending
In 2014, sources told the Herald that the Supreme Court was considering issuing a ruling with guidelines for judges on how to handle cases in which repressors file requests to be granted house arrest. The new political context may trigger that debate.
MONDAY
1. BEEF-MAD ARGENTINA PREPARING FOR UNTHINKABLE AS MEAT COSTS SOAR (Chicago Tribune)
2. BARRICK SAYS ARGENTINA COURT TO CHARGE EMPLOYEES FOR SPILL (Bloomberg News)
3. U.S. APPEALS COURT DELAYS LIFTING ARGENTINA DEBT INJUNCTIONS (Reuters News)
4. MARKETS BRACED FOR US$30BN ARGENTINA SURGE (Reuters News)
5. THE POLITICAL ECONOMY OF ARGENTINA’S SETTLEMENT WITH THE VULTURE FUNDS (The Hill)
6. THE HONEYMOON IS OVER FOR ARGENTINA’S MACRI (National Interest.org)
7. THE VULTURE: HOW BILLIONAIRE RUBIO BACKER PAUL SINGER MADE BILLIONS OFF ARGENTINA DEBT CRISIS (Democracy Now)

1. BEEF-MAD ARGENTINA PREPARING FOR UNTHINKABLE AS MEAT COSTS SOAR (Chicago Tribune)
By Pablo Gonzalez
March 13, 2016

Beef is now so expensive in Argentina, which once was the third-largest exporter, that slaughtering plants are about to start importing cattle from neighboring countries for the first time in almost two decades.

It’s a big switch for a population that eats more beef per person than any other and where the meat has become as much a part of their national identity as the tango or World Cup soccer. Rising costs have encouraged what was almost unthinkable a decade ago: beef demand is dropping, and consumers are substituting with cheaper chicken and pork.

Argentina’s cattle industry was upended by the end of price controls and a devaluation of the peso under newly elected President Mauricio Macri, who altered the policies of his predecessors to revive an economy hobbled by a government debt default.

In December, the start of the South American summer, the price of beef used for barbecues known as asados surged 28 percent. To ease the strain, Macri authorized imports of beef and cattle from neighbors like Uruguay.

“This is a shame — an unexpected event that is the result of 12 years of wrong government policies,” said Ulises Forte, who has 500 head of cattle at a ranch in La Pampa province and is president of the Institute for the Promotion of Beef Argentina (IPCVA). “Fortunately, these imports won’t be that high.”

Before Macri arrived, the governments of former presidents Nestor Carlos Kirchner and, later, his wife, Cristina Fernandez de Kirchner discouraged beef exports with rules intended to keep domestic supplies ample and prices low. Instead, ranchers lost the incentive to expand herds, which shrank to 52 million head last year from 60 million in 2003. Raising cattle was more costly than using the land to grow soybeans, so many switched.

Argentina’s beef exports, which surpassed all but Brazil and Australia in 2005, tumbled 69 percent over the next decade and ranked 11th in the world last year, according to U.S. Department of Agriculture data. Shipments were the lowest in 11 years, government data show.

To revive the incentives for ranchers, the government lifted export restrictions and devalued the peso. The Argentine currency has plunged about 40 percent against the dollar since Dec. 1, which makes it more profitable for farmers and ranchers to ship their products overseas to buyers who pay in U.S. currency.

But that won’t solve the cattle problem right away. It can take two years to expand the herd because more cows are being withheld from slaughter for breeding. After a nine-month gestation period, it takes another six months or more to raise calves to slaughter weight. Beef output fell by 6 percent to 215,000 metric tons in January from December as ranchers brought fewer animals to market.

“During the Kirchner administrations, breeders dismantled their herds as beef wasn’t profitable,” said Miguel Schiariti, the president of CICCRA, an industry group. “With these new rules, the business will again be profitable, but rebuilding a herd takes time, and consumers will have to pay more for a product that was subsidized before.”

When the currency plunged, the cost of meat for domestic consumers surged. Barbecue beef jumped to 112.09 pesos ($7.29) per kilogram (2.2 pounds) in December, up from 87.68 pesos in November, industry data show. That’s discouraged buying in a country where people eat 1.1 kilograms of beef a week on average. Demand for the meat tumbled 7 percent in January from the same month in 2015.

To ease the pain, Macri lifted import restrictions. The last time Argentina allowed ranchers to bring in cattle from outside the country was 1998, and it rarely permits non-domestic meat. In 2013, the government authorized 1.5 tons of rib imports, and in the 1990s allowed 10 tons of sweet breads from the United States.

“We can import because our beef prices are higher than our neighbors,” said Maria Antonelli, an analyst at the Bahia Blanca Exchange. The export price of Argentina’s novillo is $330 a metric ton, compared with $320 for the same cut from Uruguay, $235 from Brazil, and $245 from Paraguay.

While Uruguay consumes 30 percent of its output and exports the rest, Argentina has been eating a larger share of its domestic supply. The country now eats 93 percent of production, exporting only 7 percent, compared with the average of past years when it consumed 70 percent and shipped 30 percent, government data show.

Uruguay, which is 15 times smaller than Argentina by land area, exported 360,000 tons last year, while Argentina shipped just 230,000 tons. Paraguay exported 400,000 tons, and Brazil shipped 1.6 million tons.

“The U.S. model of importing cheap beef for ground beef and exporting expensive cuts to Asia would be a good model to be followed by Argentina,” said Raul Milano, executive director at Rosario-based Mercado Ganadero SA, the country’s largest broadcast auction market. “We should also export most of the tenderloin we can and import ribs.”

For the next year or so, Argentina’s ranchers will focus on increasing cattle weights to generate more beef for export, even as they withhold more cows for breeding.

“Breeders will have the chance to fatten their herds and get higher export prices in two years,” Leonardo Sarquis, the agriculture minister of Buenos Aires province, said in an interview in Ramallo, 214 kilometers (133 miles) north of Buenos Aires.

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2. BARRICK SAYS ARGENTINA COURT TO CHARGE EMPLOYEES FOR SPILL (Bloomberg News)
By Danielle Bochove
March 11, 2016
* San Juan province to impose a fine of about $9 million
* Leak detected on Sept. 13 from a faulty valve at Veladero

Barrick Gold Corp. confirmed on Friday that an Argentine court will proceed with criminal charges against nine current and former Barrick employees in connection with a cyanide solution spill last year.

Separately, the San Juan provincial government announced it intends to impose a fine of about $9 million against Barrick, the company said in a statement.

Confirmation of the charges comes after Diario de Cuyo reported Thursday that the nine had been “processed” more than a week ago by Judge Pablo Oritja over the September incident at the Veladero mine, citing judicial sources it didn’t identify.

“Barrick is not a party to any criminal cases,” Andy Lloyd, a spokesman for Barrick, said by e-mail. “The individuals are being represented by their own lawyers. As with any criminal case, there is a presumption of innocence until proven otherwise and as such we are providing support to the individuals affected.”

The company couldn’t comment on whether the individuals could face prison terms, Lloyd said. It will decide whether to challenge the government fine once it has had a chance to fully analyze it.

Cyanide solution is used in the leaching process at the gold mine. The leak, which was detected on Sept. 13 from a faulty valve, resulted in 1.1 cubic meters of solution escaping and led to a court order to temporarily suspend leaching.

Earlier this month, a statement posted on the presidential palace website said that a police report showed five rivers in San Juan province were affected by the spill. Water samples taken immediately following the incident, and in the months following, showed there was no risk to the health of people or the environment downstream from the mine, Toronto-based Barrick said in the statement.

Barrick, the world’s largest gold producer, said it has strengthened controls and safeguards at the mine since the leak occurred.

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3. U.S. APPEALS COURT DELAYS LIFTING ARGENTINA DEBT INJUNCTIONS (Reuters News)
11 March 2016

NEW YORK, March 11 (Reuters) – A U.S. appeals court on Friday put on hold a judge’s ruling lifting injunctions that have restricted Argentina from paying off some debts in light of the country’s $6.5 billion offer to settle litigation over bonds in default since 2002.

The 2nd U.S. Circuit Court of Appeals in New York stayed the March 2 ruling by U.S. District Judge Thomas Griesa until it could hear an appeal by creditors opposed to the lifting of the injunctions.

According to court documents, Argentina did not oppose the creditors’ request to stay the order. It had earlier secured an expedited appeal, arguing that “without prompt resolution, settlement of the largest claims in this long-running litigation may be in jeopardy.”

Lawyers for Argentina and representatives for various creditors did not immediately respond to request for comment.

The 2nd Circuit, in an order earlier on Friday, set a briefing schedule that would run through March 25. It said the date of any arguments would be determined “at a later time.”

Griesa’s ruling vacating the injunctions was conditioned on Argentina repealing two laws concerning its debts and paying creditors who by Feb. 29 reached settlements with the country.

Argentina made the request to lift the injunctions after offering on Feb. 5 to pay $6.5 billion to settle lawsuits by various bondholders stemming from its record $100 billion default in 2002.

The injunctions at issue prevented Argentina from servicing its restructured debt until it paid the investors, who spurned its 2005 and 2010 debt restructurings.

Those restructurings resulted in 92 percent of its defaulted debt being swapped and investors being paid less than 30 cents on the dollar.

Argentina has reached agreements in principle to pay more than $6.4 billion to creditors, including $4.65 billion to four of the biggest creditors in the dispute, including Elliott Management’s NML Capital Ltd and Aurelius Capital Management.

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4. MARKETS BRACED FOR US$30BN ARGENTINA SURGE (Reuters News)
11 March 2016

BUENOS AIRES, March 11 (IFR) – Argentina’s progress in settling a 15-year old battle with creditors could unlock more than US$30bn of new bond sales out of the South American country this year, as local governments and corporates join the sovereign in a rush to the capital markets.

The federal government alone is expected to tap foreign bond investors this year for anywhere between US$20bn and US$25bn as it seeks to make good on payments with litigant creditors, pay past due interest stemming from its 2014 default and cover a gaping fiscal deficit.

Provinces are likely to follow closely behind with bankers estimating another US$3bn-$5bn in new supply from local governments as they try to fund their own fiscal holes, refinance outstanding debt and garner funds for much-needed investments in infrastructure.

“The message from the federal governments is go out there and tap the market,” a Buenos Aires-based banker told IFR. “Don’t depend on the government.”

The cash-starved Province of Buenos Aires jumped ahead of the crowd on Wednesday, taking advantage of positive sentiment to raise US$1.25bn through a new seven-year bond that priced at a yield of 9.375%.

The western province of Mendoza, which boasts rich mining and oil resources in addition to its Malbec vines, is also thought to be close to coming to market with a bond sale of up to US$500m after it recently met investors in New York, said market participants.

Provincial governments in Cordoba, Chubut, Santa Fe, Neuquen and Salta are also on bankers’ maps as potential candidates for new bond issues.

Cordoba, which has some US$600m in US dollar bonds falling due in 2017, could come with an issue of up to US$1bn, said one analyst.

The city of Buenos Aires, meanwhile, already has authorisation to issue up to US$890m this year to refinance bonds maturing in 2017 and fund new infrastructure projects, the city’s director of public credit told IFR.

Other potential borrowers, some of which spoke directly with IFR, are watching the market closely and are debating whether to come before or after Argentina launches its first international debt placement in close to 15 years.

SUPPLY PRESSURES

Argentine debt curves have come under pressure in anticipation of the sovereign’s multi-tranche deal, which could be US$11bn in size or more and is expected to be launched before mid-April.

New sovereign debt under New York law will serve as a fresh pricing benchmark for corporates and provinces alike.

Argentina’s new bond sale could pay yields of 7.25% on a five-year, 8.4% on a 10-year and 9.7% on a 30-year, Citigroup’s head of emerging markets Guillermo Mondino wrote in a report on Thursday.

But Buenos-Aires-based bankers reckon that the Republic might replace the 30-year tranche with a shorter-dated 15-year to save on costs.

Still, supply concerns and uncertainty over the new government’s ability to turn the economy around are giving some corporates pause and playing into their financing strategies.

Corporates have largely relied on short-term financing in the local bond markets, where nominal rates have soared to north of 30% as the central bank puts the brakes on a falling peso in an effort to contain inflation.

Yet while CFOs remain reticent about issuing debt in an economy that could see negative growth this year, corporates may want to refinance expensive short-term peso debt, which impacts on cashflows, with cheaper long-term US dollar funding.

“There is a line forming,” said Walter Stoeppelwerth, head of research at brokerage Balanz Capital, a Buenos Aires-based brokerage and asset manager. “Everybody wants a lower cost of capital.”

He mentioned Clarin’s Cablevision subsidiary, dairy producer Mastellone Hermanos, power producer Pampa Energia and gas distributor Metrogas as some of the companies that could benefit from lower-cost international funding.

The first wave of corporates may be those with immediate refinancing needs.

Real estate company Raghsa, confectionery company Arcor, Banco Macro, credit card company Tarjeta Naranja, tollroad Autopistas del Sol and state-owned oil company YPF all have US dollar debt falling due over the next year or so, according to Thomson Reuters data.

YPF has already mandated banks on a US$500m bond, while real estate firm IRSA is marketing a seven-year bond to fund a debt tender.

Power company Pampa Energia is also considering a bond issue to help finance its potential acquisition of assets from Brazilian oil company Petrobras, a company official told IFR this week.

PALATABLE TRADE

Corporate debt could be a palatable trade for hedge funds already involved in Argentina but looking to rotate out of the sovereign as spreads compress.

“We are pitching to local corporates,” said Agustin Rabinovich, head of sales at boutique investment bank AdCap.

“First [they could do] something local, then a private placement abroad and then an international debt .”

After years of depressed capital expenditure and limited access to the capital markets, Argentina corporates have plenty of room to increase debt to fund new projects.

“The corporate sector is under-leveraged relative to other countries,” said Daniel Marx, executive director of financial advisory firm Quantum Finanzas and Argentina’s former secretary of finance.

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5. THE POLITICAL ECONOMY OF ARGENTINA’S SETTLEMENT WITH THE VULTURE FUNDS (The Hill)
By Mark Weisbrot, contributor
March 14, 2016

After 15 years of court battles, injunctions, smear campaigns, lobbying and other interventions, the vulture funds have finally won a tentative agreement with the new Argentine government. Vulture funds — the name preceded this particular dispute — are so called because they buy up defaulted debt for a very small fraction of its face value, then sue (and use other tactics) to collect an exorbitant return.

In the case of Argentina, the chief vulture, American billionaire and major Republican campaign donor Paul Singer, will get an estimated 370 percent return; another vulture fund in the settlement did even better, with a return of 950 percent.

The agreement is tentative because President Mauricio Macri of Argentina still has to get the nation’s Congress, in which he does not have a majority, to change some laws in order to finalize the deal. And he will also have to reach agreement with some remaining “holdout” creditors. And now the vulture funds are appealing the judge’s order that would allow Argentina to issue new debt, presumably in an effort to extract even more concessions. Assuming it all works out, though, there are some important lessons to be learned from this long war over sovereign debt.
Argentina arguably had no alternative but to default in 2002, but the government also did the right thing by standing up to the International Monetary Fund (IMF) and its international creditors until it reached a deal (in 2003 and 2005) that would allow the economy to recover.

International lenders — in this case, a creditors’ cartel headed by the IMF — often succeed in getting a settlement that keeps the country trapped in recession, depression or very low growth with an unsustainable debt burden; the settlement also entails numerous conditions (cuts to social spending, public pensions, public employment) that harm the majority of the debtor country’s citizens. Some of the worst recent examples of these abuses can be seen in countries like Greece and Jamaica, and will likely include Puerto Rico if there is a debt restructuring there.

By taking a hard line with its foreign creditors, Argentina reached an agreement with 93 percent of them that allowed the country to do very well over the ensuing 14 years. Instead of a prolonged depression as in Greece, or limping along from one crisis to the next, Argentina began an extraordinarily robust recovery just three months after its default and enjoyed very high growth — more than 90 percent in real gross domestic product (GDP) from 2002 to 2015. (There is some dispute over the exact number, but it does not change the story.) This enabled Argentina to reduce poverty by about 70 percent and extreme poverty by 80 percent, in the 10 years from 2003 to 2013.

So, even though the country would later run into economic trouble — in the world recession of 2009, but also in the last four years — there is no doubt that it pursued very successful economic policies which it would not have been able to implement under a less-favorable agreement with its creditors. Now, about the slowdown of the past four years, in which the economy has grown by about 1.1 percent annually: Part of the problem was that Argentina could not borrow on international markets, due to its inability to settle with the vulture funds. For Argentina’s detractors, this proves that the default and subsequent tough negotiation were wrong. But clearly that is not the case; the alternative offered by the IMF and the creditors was vastly worse.

The problem is really the vulture funds, and also the foreign policy goals of certain actors within the United States who were against the prior government of Argentina. Here is Judge Thomas Griesa, of the Federal District Court for the Southern District of New York, to whom The New York Times devoted an article describing his incompetence: “Put simply, President Macri’s election changed everything.” That was from Griesa’s decision of Feb. 19, explaining why he decided to conditionally lift the injunction he had imposed against Argentina in 2014, which the Financial Times editorial board generously described as “eccentric rulings,” and which prevented Argentina from making its debt payments. In other words, he much preferred the new, right-wing, pro-Washington government, as opposed to the prior, left-wing government that he helped get rid of. Griesa’s unprecedented decision to take 93 percent of Argentina’s creditors hostage on behalf of the vulture funds was obviously political at the time. Now he has admitted it, to the chagrin of our legal system.

Argentina had appealed Griesa’s injunction to the U.S. Supreme Court, and the governments of France, Brazil and Mexico, and the Nobel Prize-winning economist Joseph Stiglitz, filed briefs on its behalf. Interestingly, the IMF announced that it, too, would file a brief on behalf of Argentina. This was not because the IMF loved the Argentine government, but because Griesa’s decision was considered a threat to the stability of the international financial system. But the U.S. Treasury forced the IMF into an embarrassing retreat, most likely due to pressure from the vulture lobby and some anti-Argentina members of Congress, in particular from Florida, who could threaten to hold up legislation that the IMF needed.

Did I mention that vulture fund chief Paul Singer is a major contributor to Florida Sen. Marco Rubio

(R), and is rumored to become finance chair for his presidential campaign?

The U.S. government also stopped blocking loans to Argentina at the World Bank and the Inter-American Development Bank just after Macri was elected. Macri himself also has an interesting history with the U.S. State Department: In conversations with U.S. officials leaked by WikiLeaks, Macri chastised them for being “too soft” on the Argentine government and encouraging its “abusive treatment” of the U.S.

The main lesson from this whole episode is the importance of national economic sovereignty for middle-income countries like Argentina. This is what allowed Argentina to recover from disastrous economic policies implemented under IMF tutelage; and it was the infringement on this sovereignty by U.S. courts and other actors that made it difficult for Argentina to resolve the economic problems of the past few years. We will see how this new, less sovereign government fares going forward, now that it has settled with the vultures.

Weisbrot is co-director of the Center for Economic and Policy Research in Washington and the president of Just Foreign Policy. He is also the author of the new book “Failed: What the ‘Experts’ Got Wrong About the Global Economy” (2015, Oxford University Press).

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6. THE HONEYMOON IS OVER FOR ARGENTINA’S MACRI (National Interest.org)
By Nicholas Borroz
March 13, 2016

The post-Kirchner president faces an uphill battle to pass further reforms

The international investment community is smitten with Argentina’s new president, Mauricio Macri. A wealthy businessman who was voted into office in November 2015, Macri vows to facilitate foreigners’ access to his country by reducing trade barriers. Additionally, he plans to cut domestic subsidy programs, which will improve Argentina’s economic stability and therefore make it a more attractive investment destination.

Macri’s neoliberal approach contrasts starkly with that of his predecessor, Cristina Kirchner. She shielded Argentina from foreign investment in order to grow domestic businesses, imposing currency controls and restricting trade. Domestically, she instituted a comprehensive web of subsidies. These trade barriers and costly welfare programs are the primary targets of Macri’s economic reform.

After nearly a decade of populist and protectionist rule, Macri’s approach has been likened to shock therapy: necessary but painful. And so far, the results have been promising for foreign investors.

On February 29, Macri’s government tentatively reached an agreement to resolve a longstanding international legal battle that has tarnished Argentina’s reputation abroad. Fifteen years ago, the country defaulted on $100 billion in debt. Since then, most of Argentina’s creditors have accepted a debt restructuring, but a small group of creditors have steadfastly refused to be shortchanged. Kirchner maligned these “vulture funds,” and a resultant legal dispute with them severely hurt Argentina’s international image, locking the country out of many capital markets. But in February, Macri’s government announced it was closing in on a deal to repay these holdout creditors.

Another indication of the international investment community’s satisfaction with Macri occurred a week before the creditor settlement. Dan Ammann, the president of auto manufacturer GM, indicated that Brazil should adopt more business-friendly policies like those of Argentina. He said this while discussing his company’s potential scale-down of operations in Brazil, which is reeling from economic malaise and a corruption scandal. Ammann stated that Argentina shows “how the situation can quickly change with the right leadership of the economy.”

Ammann’s remarks would have been unimaginable two years ago. Brazil was until recently a major foreign investment destination—one of the so-called BRIC countries, along with Russia, India and China, which was expected to lead future global economic growth. Argentina, on the other hand, had achieved near pariah-like levels of isolation in the West due to Kirchner’s policies.

At first glance, Macri appears to deserve the praise of GM and other investors. If he continues pressing through with his reforms, international businesses investing in Argentina stand to gain much from the country’s reconfiguration.

What investors forget, however, is that Macri needs domestic support in order to implement his reforms. It really doesn’t matter how much of a darling he is outside of Argentina if he fails to rally domestic support behind his policies.

This is important to remember because Macri has a tenuous mandate. He only beat Daniel Scioli, the candidate from Kirchner’s party, by less than 3 percent of the popular vote last November. And many individuals who voted for Macri did so not out of any particular allegiance to him, but rather out of fear that Scioli would continue Kirchner’s policies.

Macri is still trying to figure out his plan to dismantle the onerous web of subsidies left by Kirchner. Given his intent to clean the country’s fiscal house, though, it seems clear that the extent of subsidies’ removal will be far-reaching. Media reports, for instance, speculate that electricity rates will rise as much as 500 percent. These rumors are anxiously circulated throughout the country, where many households have seen their disposable income shrink in recent years. For those individuals who cannot manage ballooning utility costs, the cutting of subsidies may well cost Macri their support.

Other, noneconomic, issues also hurt Macri’s popularity at home. In December, merely days after assuming the presidency, Macri appointed two supreme court judges by decree. In January, Macri again bypassed the Congress by declaring a nationwide public security emergency that would last for one year. This decree strengthened Argentina’s armed forces’ role in maintaining internal security, ostensibly with a focus on combating drug trafficking and organized crime.

Many Argentinians fear Macri’s apparently authoritarian bent, which is understandable, since the country previously suffered under decades of military rule. The public psyche is still scarred by the “disappearance” of tens of thousands of enemies of the state during that time. Suspicions of Macri were strengthened by his seeming reticence to meet with leaders of a group representing the families of the disappeared. Only after significant criticism did he finally meet with them in February.

All of this means that Macri’s sweeping economic reforms are less impressive than they first appear. If he continues to alienate large portions of the population, it is conceivable that Macri will be unable to continue his reform process. More dramatically, his reforms could be repealed once he leaves the office.

Some cynical political analysts believe Kirchner has purposefully decided to step out of the limelight to leave Macri to deal with the fallout of her policies. Once Macri fails in his attempts to save the economy, Kirchner’s movement will triumphantly return to impose protectionism and populism anew, according to this theory. Whether or not this is Kirchner’s plan, what is true is that a botched reform process would strengthen the likelihood of a swing back to the left after Macri’s presidency.

Any investor looking at Argentina should closely monitor Macri’s domestic policies, even those that do not directly impact the country’s investment climate. If Macri does not take a more conciliatory approach at home, investors abroad should not be comforted by his reforms, which may ultimately turn out to be nothing more than fleeting. As long as Macri continues down his path of shock therapy, praise for him is not yet warranted.

7. THE VULTURE: HOW BILLIONAIRE RUBIO BACKER PAUL SINGER MADE BILLIONS OFF ARGENTINA DEBT CRISIS (Democracy Now)
March 11, 2016

Argentina has reached an agreement to pay U.S. hedge funds that have sought for 14 years to profit off the country’s debt. The hedge funds bought up Argentina’s debt for bargain prices after its financial crisis, then demanded full repayment. Former Argentine President Cristina Fernández de Kirchner had refused to pay the firms, calling them “vulture funds.” But under new right-wing President Mauricio Macri, Argentina has agreed to pay $4.65 billion to four hedge funds, including Elliott Management, run by billionaire Paul Singer. The deal would see the hedge funds take about 75 percent of what they demanded from Argentina—several times more than what they actually paid for the debt. Singer’s fund itself netted $2.4 billion—10 to 15 times its original investment. We speak to journalist Greg Palast. His recent article is called “Rubio’s Billionaire Wins Ransom from Argentina.”

JUAN GONZÁLEZ: Argentina has reached an agreement to pay U.S. hedge funds that have sought for 14 years to profit off the country’s economic crisis. The hedge funds bought up Argentina’s debt for bargain prices after its financial crisis, then demanded full repayment. Former Argentine President Cristina Fernández de Kirchner had refused to pay the firms, calling them vulture funds. But under the new right-wing President Mauricio Macri, Argentina has agreed to pay $4.65 billion to four hedge funds, including Elliott Management, run by billionaire Paul Singer. The deal would see the hedge funds take about 75 percent of what they demanded from Argentina—several times more than what they actually paid for the debt. Singer’s fund itself netted $2.4 billion—10 to 15 times his original investment.

AMY GOODMAN: Paul Singer is the longtime Republican fundraiser who has endorsed Republican establishment favorite Marco Rubio in this election cycle.

For more, we go to Los Angeles, where we’re joined by journalist Greg Palast, Puffin Foundation fellow for investigative reporting. His recent article, “Rubio’s Billionaire Wins Ransom from Argentina.”

Greg Palast, explain.

GREG PALAST: Well, what happened is, is that Paul “The Vulture” Singer, who we’ve been—I’ve been following him for BBC and for Democracy Now! for about nine years. This is the guy who does—he’s called “The Vulture” not just by Argentina; he’s known by that by his friends in the banking industry. He grabs old debts of dying nations, dying companies, even dying people, and when there’s a famine or a war, for example, in Argentina, during the military dictatorship when Argentina went broke, he bought up old bonds for $50 million, just sold them back to the government of Argentina, a government he helped place in power, for two-and-a-half billion dollars. And he does this—he did this through what the Argentine government and the United States Treasury call extortion. He says, “If you don’t pay me, I’m going to stop you from borrowing money. I’m going to choke your nation to death.” He even seized an Argentine naval ship on the high seas. I mean, he’s basically a privateer or pirate.

And his—what’s important about what’s coming up in this election, the reason he influenced the Argentine election was to get a puppet president who would write him a check, which would give him a 10,000 percent profit. He’s looking for the same in the United States. Paul “The Vulture” Singer is the number one donor to the Republican Party—not the Kochs, by the way; Paul Singer. He’s the number one donor to American Crossroads, run by Karl Rove, which is basically your racial-vote-suppression-on-an-industrial-scale operation.

So, he is—why is he involved in the U.S. elections? Because during his attack on Argentina, the secretary of state, working with the president, the secretary of state sent her lawyers into a U.S. federal court and said, “Don’t force Argentina to pay off this guy.” She tried to stop the extortion on Argentina, and the president joined her and the U.S. Justice Department. And she even said, her lawyers said, that Paul Singer’s business model is a threat to the entire world financial order. This guy is like a kind of financial terrorist, actually. And that’s what Hillary Clinton accused him of. By the way, Bernie Sanders has taken a similar, very tough position against these vulture financiers.

So, Paul Singer—this issue of Argentina ain’t just 11,000 miles away, Amy and Juan. It is coming home to roost, literally, because he’s got to make sure that there is no Hillary president or President Bernie that will put him out of business. Hillary’s action probably cost him a half-billion or a billion dollars. And he’s going to—he wants blood. And he wants his guy in the White House, which means anyone but Bernie, anyone but Hillary.

JUAN GONZÁLEZ: Well, but, Greg, so why did he come behind Marco Rubio? Because, obviously—well, obviously, in Donald Trump, Trump is a candidate who’s never seen a bankruptcy he didn’t like. But what—on what basis did he go behind Rubio?

GREG PALAST: Well, Rubio did his work for him. Rubio made an unethical, frankly—it horrified a lot of people. He made direct approaches to the State Department on behalf of his top donor. Paul “The Vulture” Singer is the number one donor to Marco Rubio. And Rubio kept banging on the State Department to back his vulture donor against our ally, Argentina. This is just way out of line, even in a country where money talks. This was money screaming.

And the other thing is that, for example, Rubio was trying to help Puerto Rico by allowing Puerto Rico to have bankruptcy rights, like any American state, and then suddenly another vulture financier friend of Singer called Herenstein held a big fundraiser for Rubio. Rubio flipped around his position on Puerto Rico and said, “No, they shouldn’t have any rights. They should fire teachers and firemen and policemen, and cut pensions,” rather than cut payments to vultures like Singer and Herenstein and his donors. He literally flipped, literally within days of being funded by these guys. So Rubio showed that he’s a perfect puppet.

Now, do understand, I don’t think they expect Rubio to pull it off at this point. That would be their dream. But, you know, they’re happy with a Trump, who’s actually, you know, a member of the club. And they’re happy with any Republican at this point, mainly because both Democratic Party candidates have not only said that they don’t—that they’re not going to do what Singer wants, that they might actually put him out of business. And that, he is not going to tolerate. That’s why he’s backing Karl Rove and American Crossroads, because no matter who is there, he’s got to make sure that the—if all the votes are counted and you count the Puerto Rican-American vote in the United States, and, you know, if you count the progressive vote and the minority vote, they can’t win, so he’s got to come up with other ways of doing it. That’s—so, Singer is not just—it’s not just backing Rubio. It’s backing the whole vote suppression machinery that’s being run by the Republican Party. I’m not being partisan. You know, I’m an investigative reporter. I’ve been—

AMY GOODMAN: We have five seconds, Greg.

GREG PALAST: —following this guy for years around the planet. OK.

AMY GOODMAN: Greg, I want to thank you very much for being with us from L.A., journalist and Puffin Foundation fellow for investigative reporting. His recent piece, we’ll link to, “Rubio’s Billionaire Wins Ransom from Argentina.”

And that does it for the show. Democracy Now! has three job openings: broadcast engineer, a director of finance and operations and a director of development. Visit democracynow.org for more information.

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ARGENTINE UPDATE – Mar 11 & 12, 2016

13 marzo, 2016

Barnes de Carlotto tells Herald
Saturday, March 12, 2016
Rights groups to seek US aid in quest for truth, justice

Human rights groups will take to the United States Embassy a request for Washington’s cooperation in investigations into crimes against humanity ahead of Barack Obama’s visit to the country on the eve of the 40th anniversary of the last military coup.

“We will file a request before the embassy as we want the US to declassify information regarding the era of state terror,” Grandmothers of Plaza de Mayo head Estela Barnes de Carlotto explained to the Herald in an interview at the organization’s headquarters in Buenos Aires City.

“We want the US judiciary and the government to cooperate because we are investigating several baby-snatching cases with links to that country,” Barnes de Carlotto added.

In November, Delia Giovanola — one of the founders of Grandmothers of Plaza de Mayo — found her grandson, born in December, 1976 in the clandestine detention centre known as Pozo de Banfield and then snatched from his mother’s arms. The man has been living for over a decade in the United States.

His appearance and Obama’s visit to the country triggered the human rights’ petition. According to sources from the organization headed by Barnes de Carlotto, there are about half a dozen probes into potential child appropriation cases that have led them to the United States, but the probes have not made progress.

“Our efforts have been fruitless because we haven’t obtained a response from the Department of Justice. We need the courts to help us especially in cases when we have to collect and preserve blood samples for the DNA tests,” the leader of Grandmothers of Plaza de Mayo added.

Human rights groups are looking to meet with US Ambassador Noah Mamet before Obama’s arrival, scheduled for March 23, a day before the commemoration of the 40th anniversary of the last military coup. The presence of the US leader has already sparked controversy among activists.

Meeting Obama?

Despite media reports indicating that Barnes de Carlotto will be meeting Obama when he arrives in Buenos Aires, the iconic human rights leader said that nothing has been arranged so far.

“I will not meet Obama. I will only meet him if he wants to greet us in a silent place and to give him our petition,” Barnes de Carlotto said, making it clear that any decision will be made between the group of organizations that have already met with President Mauricio Macri at the Olivos presidential residence last month.

“We don’t want to see him, but we will go if he wants to meet us,” she added.

Other iconic leaders such as Nobel Prize Winner Adolfo Pérez Esquivel sent a letter requesting Obama not to visit Argentina on the anniversary of the last military coup whereas Hebe de Bonafini, the head of the Association of Mothers of Plaza de Mayo, said the US leader should be repudiated. HIJOS — the group that gathers together children of state terror victims — made it clear they did not want Obama to visit the former Navy Mechanics School (ESMA) as it was first suggested by government officials.

“Thankfully, Obama’s visit to the ex-ESMA memorial was dismissed. This is a very painful date for us and the ESMA represents a very particular place. As I always say, you don’t know if you are stepping on remains,” she said.

Survivors have testified that some of the bodies of prisoners were cremated or buried outside the Officers’ Quarters, where the country’s most infamous clandestine detention centre operated.

Differences
While some point out that US was the mastermind of the repressive coordination between the dictatorships in the Southern Cone during the 1970s, some human rights organizations also praise the role played by former US president Jimmy Carter to report the crimes that were being perpetrated.
“We understand that Obama had nothing to do with that era, but it is clear that he is coming here for some reason and that there was also a reason why he did not come before,” Barnes de Carlotto said.
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FRIDAY, March 11 & SATURDAY, March 12

1. JUDGE DECLINES TO REOPEN CASE AGAINST EX-PRESIDENT KIRCHNER OF ARGENTINA (The New York Times)

2. ARGENTINA COMPLETING LAW TO BOOST CONSUMPTION OF CLEAN ENERGY (Bloomberg News)

3. BARRICK GOLD LOOKING INTO ARGENTINA MINE SPILL ACCUSATIONS (Bloomberg News)

4. ARGENTINA SLASHES PRIMARY DEFICIT IN JANUARY AMID SPENDING CUTS (Bloomberg News)

5. BELLO: THE RETURN OF AN OLD ENEMY (The Economist)

6. ARGENTINA SAYS ECONOMY TRIPPED 3.5 PCT LOWER IN 4TH QTR (Reuters News)

7. ARGENTINA’S PRIMARY DEFICIT WIDENS SHARPLY IN 2015 ELECTION YEAR (Reuters News)

8. ARGENTINA TO CARRY OUT INTERNATIONAL HUNT FOR NEW YPF CEO (Platts Commodity News)

9. TOURISTS IN ARGENTINA WATCH MASSIVE GLACIER BREAK APART (The Washington Post)

1. JUDGE DECLINES TO REOPEN CASE AGAINST EX-PRESIDENT KIRCHNER OF ARGENTINA (The New York Times)
By Jonathan Gilbert
March 11, 2016

BUENOS AIRES — A federal judge on Thursday refused to reopen a criminal complaint against former President Cristina Fernández de Kirchner first brought by a prosecutor who died in mysterious circumstances last year, according to Télam, the state news agency.

Prosecutors thought they had new documents that warranted trying to revive the case against Mrs. Kirchner and her political supporters. The prosecutor who later died, Alberto Nisman, had accused Mrs. Kirchner and others of conspiring to derail his investigation into the 1994 fatal bombing of a Jewish center in Buenos Aires. The complaint dissolved in Argentina’s courts.

Judge Daniel Rafecas said Thursday that the new documents presented were not sufficient to reverse his decision last year to dismiss the complaint, reiterating his determination that there was no evidence of a crime. The ruling can be appealed by Gerardo Pollicita, the prosecutor who sought to revive the case.

Mr. Nisman died of a gunshot to the head days after filing the original criminal complaint, but it has not been established whether it was a suicide or murder.

2. ARGENTINA COMPLETING LAW TO BOOST CONSUMPTION OF CLEAN ENERGY (Bloomberg News)
By Vanessa Dezem and Pablo Rosendo Gonzalez
March 10, 2016

* Law requires large consumers to use 25% clean energy by 2025
* Companies will gradually return to invest in Argentina’

Argentina is poised to approve the final details of a new law designed to give a boost to renewable energy as President Mauricio Macri steps up his efforts to fight climate change.

The law will impose fines on large users of electricity that don’t get at least 8 percent of their power from renewable sources, starting in 2018, according to Juan Carlos Villalonga, a lawmaker from the governing party Cambiemos.

The legal framework will be completed this week. Once enacted, the government will auction 1 gigawatt-hour of electricity from renewable generators.

“Once the framework is fixed by the government, with clear rules for all the players, Argentina will be able to quadruple the amount of electricity currently on offer from renewable companies as required by law before 2018,” Villalonga said in an interview in Buenos Aires after meeting with the Energy and Mining Minister Juan Jose Aranguren and a delegation from the Global Wind Energy Council.

Fosssil Fuels

More than 60 percent of Argentina’s energy comes from fossil fuels. The country has 215 megawatts of installed wind-power capacity and almost no solar or biomass plants, according to Bloomberg New Energy Finance.

Lawmakers approved policies in September to increase clean-energy generation. The new rules will require industrial consumers to gradually increase their use of renewable power to 25 percent by 2025. The penalty for non-compliance is equivalent to the cost of imported diesel.

“Companies will gradually return to invest in Argentina,” said Steve Sawyer, secretary general of the Wind Energy Council, an international trade group for the wind-power industry. “Prices per megawatt-hour are expected to at least double in first auction. In future auctions, prices would decrease.”

The law also creates a fund to finance or buy stakes in renewable-power projects. It enables bilateral power purchase agreements directly between generators and large consumers, instead of restricting those consumers to the state-owned utility Cia. Administradora del Mercado Mayorista Electrico SA, known as Cammesa.

“Argentina’s new government is looking closely to renewable sources, in a strategic way,” said Lilian Alves, a New Energy Finance analyst in Sao Paulo. “Argentina needs to add power capacity right now. In the last years, there were few additions, while the energy demand is still increasing. Wind and solar energy would be a good alternative, because these parks can be built in a short time.”

3. BARRICK GOLD LOOKING INTO ARGENTINA MINE SPILL ACCUSATIONS (Bloomberg News)
By Danielle Bochove
March 10, 2016

* Statement follows article that judge `processed’ employees
* Leak detected on Sept. 13 from a faulty valve at Veladero

Nine current and former Barrick Gold Corp. employees are facing accusations of negligence in Argentina over a cyanide solution spill last year, a local newspaper reported. Barrick said it has not yet confirmed whether any charges had been brought.

Diario de Cuyo reported Thursday that the nine had been “processed” more than a week ago by Judge Pablo Oritja over the September incident at the Veladero mine, citing judicial sources it didn’t identify. They weren’t detained, it reported.

“Barrick notes media reports that the Jachal Court of San Juan province, Argentina will continue investigating nine current and former Barrick employees as suspects of a potential crime in connection with an unauthorized release of processing solution,” the company said in a statement Thursday. “If confirmed, this is a standard legal process under Argentina’s civil law code.”

Cyanide solution is used in the leaching process at the gold mine. The leak, which was detected on Sept. 13 from a faulty valve, resulted in 1.1 cubic meters of solution escaping and led to a court order to temporarily suspend leaching.

‘Disappointed’ Partners

Earlier this month, a statement posted on the presidential palace website said that a police report showed five rivers in San Juan province were affected by the spill. Water samples taken immediately following the incident, and in the months following, showed there was no risk to the health of people or the environment downstream from the mine, Toronto-based Barrick said in the statement.

Barrick, the world’s largest gold producer, said it has strengthened controls and safeguards at the mine since the leak occurred.

“We recognize that we have disappointed many of our partners in San Juan province and we deeply regret this incident,” Barrick President Kelvin Dushnisky said in the statement. “The company is committed to ensuring we have robust polices and standards in place that protect the environment at all of our operations.”

Andy Lloyd, a Barrick spokesman, said in an e-mail that the company hasn’t yet confirmed whether charges have been laid.

4. ARGENTINA SLASHES PRIMARY DEFICIT IN JANUARY AMID SPENDING CUTS (Bloomberg News)
By Charlie Devereux
March 10, 2016

* Primary budget gap cut 91%, while 2015 deficit rose to 5.4%
* New methodology consistent with that used by private analysts

Argentina’s primary budget deficit narrowed 91 percent in January from the year earlier as the new government of President Mauricio Macri cut spending.

The deficit narrowed to 548 million pesos ($36 million) from 5.8 billion pesos, the Finance Ministry said on its website. The shortfall would have been even smaller, but for a change in methodology, with the government excluding transfers from the central bank and the pension fund as part of its income.

The improvement comes after the deficit ballooned 73 percent to 292 billion pesos last year, representing 5.4 percent of gross domestic product. Macri has pledged to reduce the deficit by 1 percentage point this year and bring it to virtually zero by the end of his term in 2019. While January’s results show a significant reduction in spending, it’s too early to call it a trend, said Luciano Cohan, chief economist at Buenos Aires-based Elypsis.

“You’ve got a contraction in spending of nearly 10 percentage points in real terms, but this can be explained by the process of a new government taking control of spending in which payments are delayed because of revisions,” Cohan said by phone. “It seems much of this could revert in the coming months although the first signal they’ve given is of a very strong contraction in spending.”

Fiscal revenue in January rose 29.7 percent, in line with inflation, and spending increased by 22.6 percent. While the government increased outlays on social security 47.4 percent, all other categories rose less than inflation.

The new methodology more than quadrupled the estimate given by the previous government for the January 2015 deficit of 1.46 billion pesos.

5. BELLO: THE RETURN OF AN OLD ENEMY (The Economist)
12 March 2016

An inflation test for Latin America’s central banks

OLDER Latin Americans still have vivid memories of hyperinflation. Bello recalls changing money in dark doorways in the mid-1980s in Bolivia and being handed a truncheon of greasy banknotes secured by rubber bands. Peru went through a futile currency reform in which the sol lost three zeros and was briefly renamed the inti, which promptly racked up more zeroes.

Hyperinflation destroys businesses, undermines political systems and hits the poor especially hard. Latin America should have learned this painful lesson. So when in Caracas recently Bello was given a large shoebox packed tightly with banknotes in return for a few hundred dollars, he received it with an eerie sense of déjà vu and dismay. Official statistics put the rise in the consumer-price index in Venezuela last year at 181%, the world’s highest; the IMF forecasts 720% this year. Venezuela is extreme in its economic mismanagement. But while the rest of the world worries about deflation, across Latin America prices are rising. In Argentina, inflation is forecast to spike from 27% to 33% at an annual rate; in Brazil it stands at around 10.5%; in Uruguay, it is only one point lower, and in Colombia it has climbed to 7.6%. In Chile, Peru and Mexico it has also ticked up.

The reasons vary somewhat. In Venezuela and Argentina, inflation is mainly the result of printing money to finance indiscriminate subsidies. Ironically, it is rising now in Argentina partly because the new government of Mauricio Macri is cutting those subsidies.

In Brazil, too, the government cut subsidies on electricity and petrol in 2015. But the main reason inflation is so high there, even though the economy is in deep recession, is price indexation, according to Edmar Bacha, an economist who helped tame chronic inflation in the 1990s. By law, the minimum wage was raised in January by 11.6%; it in turn has a big influence on other wages and the prices of services, as well as on pensions. And that, plus past fiscal laxity, has made a mockery of the Central Bank’s (unambitious) inflation target of 2.5-6.5%.

Elsewhere the rise in inflation is the result of currency depreciation, which is driving up the price of imports (see chart). This is also a factor in Brazil and Argentina. Though very large, these depreciations are healthy: they are the way that Latin America’s economies are adjusting to sharply lower prices for their commodity exports. But they pose a dilemma for central banks that are committed to inflation targeting. In Brazil, Chile, Colombia and Peru central bankers began raising interest rates last year even as their economies slowed or were stagnant. Argentina, too, put up its interest rate last month.

The good news is that the rate at which currency depreciation in Latin America is passed through into domestic price increases is much lower than in the past, according to Alejandro Werner of the IMF. The Fund’s research shows that before 1999, when several Latin American countries floated their previously fixed currencies and adopted inflation targeting, large depreciations were associated with very high rates of inflation. Now the average pass-through in these countries is below 10% (ie, if the currency depreciates by 10%, domestic prices will rise by less than 1%).

Mexico’s central bank also raised its interest rate last month even though inflation is below its target. The peso has been clobbered by the fall in the oil price and by the weakness of manufacturing in the United States, to which Mexico’s economy is closely linked. Because the peso is very liquid and trades round the clock offshore, betting against it seems to be “the path of least resistance” for currency traders, says Luis Arcentales of Morgan Stanley, a bank.

Mexico’s central bank also announced that it would start intervening at its discretion in the currency market. So is it now targeting the exchange rate, rather than inflation? Not really: it was worried that the speed of peso depreciation would feed expectations of higher inflation down the road. “By acting forcefully today it will probably need to tighten less later on,” says Mr Arcentales.

The currency depreciations of the past two years are the first big test for inflation targeting in Latin America. One can argue whether individual central banks should have tightened monetary policy earlier or later. The big picture is that those countries that have been serious about inflation targeting are adapting to a tougher external environment at much less cost than those that have not been. They, at least, have learned the lessons of the 1980s.

6. ARGENTINA SAYS ECONOMY TRIPPED 3.5 PCT LOWER IN 4TH QTR (Reuters News)
By Hugh Bronstein
March 10, 2016

Argentina’s economy was in freefall by the end of last year and its fiscal accounts left in tatters by high spending ahead of the November presidential election, the government said in the first major data release of the new administration.

The 2015 primary deficit was 5.4 percent of gross domestic product versus 3.8 percent in 2014, the finance ministry said on Thursday after a top official told local TV that the economy shrank 3.5 percent in the last three months of the year.

President Mauricio Macri took office in December promising to bolster an economy hobbled by trade and currency controls. Since then he has floated the currency, cut taxes and trade barriers and eliminated thousands of public jobs. His challenge is to cut state spending while stimulating growth.

If he pulls it off, Argentina could become a bright spot in an emerging markets landscape blighted by Latin American corruption scandals, slower commodities demand from China and fear higher U.S. interest rates could push investment out of developing countries and toward the dollar.

“This is not an economy that is cooling. It’s an economy in clear recession. We had a very negative final quarter of last year combined with the central bank printing a record amount of pesos,” Macri’s Cabinet chief Marcos Pena told local TV late on Wednesday when he announced the 3.5 percent slump in GDP.

Pena did not say if the quarterly contraction was measured against the third quarter of last year or the fourth quarter of 2014. The country’s statistics remain cloudy as Macri reforms a statistics agency long discredited for publishing false data.
“The 3.5 figure could reflect the revamped statistical approach, with worse growth and inflation expectations under more credible methodology,” said Washington-based emerging markets consultant Gary Kleiman.

In January, Macri’s first full month in office, the primary fiscal deficit came out at $39.2 million, 91 percent narrower than the same month a year earlier. The primary deficit does not factor in debt payments.
Previous President Fernandez left office in December with inflation at about 30 percent per year. Macri’s economic team said the rate will slow to 1 percent per month in the second half of 2016.

The government says it would like to issue billions of dollars in international bonds next month, once a deal is finalized with creditors who rejected Argentina’s 2005 and 2010 debt restructurings and went to court for full repayment of obligations the country defaulted on in 2002.

Fernandez refused to negotiate with the creditors, who she derided as “vultures”. But Macri is in a hurry to end the 14-year legal battle over the country’s $100 billion default. The unresolved court case has hamstrung Argentina’s finances by locking the country out of the global credit markets.

“Stagflation will linger into the president’s first year regardless of the debt deal and the removal of capital controls,” Kleiman said.

7. ARGENTINA’S PRIMARY DEFICIT WIDENS SHARPLY IN 2015 ELECTION YEAR (Reuters News)
By Hugh Bronstein and Richard Lough
March 10, 2016

Argentina’s primary fiscal deficit widened sharply in 2015 to 5.4 percent of gross domestic product, official data showed on Thursday, with the increase in public spending outpacing revenue gains ahead of the last presidential election.

Taming the fiscal deficit is one of the top policy priorities of President Mauricio Macri, who won election in November and has slashed power subsidies and laid off tens of thousands of public workers in a drive to lower Argentina’s bloated public sector wage bill.
The primary deficit, which does not include debt payments, grew to 291.66 billion pesos ($22.26 billion) in 2015, marking a 73 percent increase in peso terms.

The data showed public spending increased by 34.5 percent from the previous year, while government earnings increased 31.6 percent. Finance Minister Alfonso Prat-Gay estimates inflation was running at about 30 percent.
Former President Cristina Fernandez’s leftist government spent heavily ahead of the election to spur domestic consumption in a bid to revive a stagnating economy.
In January, the primary deficit came to 548.0 million pesos, 91 percent narrower than the 5.77 billion peso deficit recorded in the same month a year earlier.

Argentina recorded a primary fiscal deficit of 3.8 percent in 2014, according to the finance ministry’s latest data. ($1 = 13.10 pesos on Dec. 31)

8. ARGENTINA TO CARRY OUT INTERNATIONAL HUNT FOR NEW YPF CEO (Platts Commodity News)
By Charles Newbery
10 March 2016

Buenos Aires (Platts)–10Mar2016/1112 am EST/1612 GMT Argentina’s state-run energy company YPF will look widely for a new CEO to replace Miguel Galuccio, who will resign at the end of April, a government official said Thursday.

“An international search will be made to find the most qualified person for the role,” the government’s cabinet chief, Marcos Pena, said on Radio Mitre.

He spoke a day after the administration of President Mauricio Macri, who took office in December, asked for Galuccio to resign after four years of running YPF, the country’s biggest oil and natural gas producer and top refiner.

Galuccio will step down April 30 as chairman and CEO.

His replacement as chairman will be Miguel Angel Gutierrez, a long-time banker.

Pena said YPF will benefit from “splitting” among two people the roles Galuccio held, allowing the CEO to focus on “the day-to-day of the company.” Macri had hinted that Galuccio could be replaced after winning the presidential election in November, but it nevertheless came as a surprise to many in the oil industry.

Galuccio, a 47-year-old petroleum engineer, has overseen a turnaround in YPF’s oil and natural gas production after it had declined by 6% annually between 2004 and 2012 under the control of Spain’s Repsol. Galuccio came on board in 2012 after the re-nationalization of the company, helping revive production, which grew a 13.5% year on year in 2014 and 3% in 2015 by squeezing more out of maturing conventional reserves and putting into production huge unconventional resources.

Galuccio’s performance has won him management awards and wide recognition in the oil world, helping to attract partners like Chevron, Dow Chemical and Petronas for projects in shale and tight plays.

Pena applauded Galuccio’s performance, but nonetheless said change was needed.

“A renewal was needed in the leadership of the company,” he said. “It’s healthy to renew and make a change.”

Galuccio “has finished a stage, in which he has made an important contribution, defending [YPF] against politicization,” Pena said. “There is no question that he defended the company and worked to ensure that the company could reach its rightful place within the energy system.”

YPF produces 43% of Argentina’s 532,000 b/d of crude and 30% of its 120 million cu m/d of gas, according to the Argentine Oil and Gas Institute, an industry group. It has a 58% share of diesel and gasoline sales, according to company estimates.

9. TOURISTS IN ARGENTINA WATCH MASSIVE GLACIER BREAK APART (The Washington Post)
March 10, 2016

https://img.washingtonpost.com/rf/image_1484w/2010-2019/Wires/Online/2016-03-10/AP/Images/ArgentinaGlacier-014f8.jpg?uuid=5Bek6ObzEeWpzmgQVcegXw
BUENOS AIRES, Argentina — Tourists in southern Argentina had the opportunity to witness a breathtaking natural phenomenon when huge chunks of the Perito Moreno Glacier broke off in front of them.

The pieces of ice crashed into Lake Argentina on Thursday, prompting cheers from onlookers at Los Glaciares National Park.

The massive natural monument in the province of Santa Cruz is approximately 97 square miles (250 kilometers), and its walls tower about 70 meters (yards) over water level.

Periodically the glacier advances over the lake and then breaks off.

The glacier last ruptured in March 2012.

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ARGENTINE UPDATE – Mar 8, 2016

9 marzo, 2016

SAVE THE HERALD

Estimados amigos del BUENOS AIRES HERALD “of the good old days”,

Según versiones que circulan en la ciudad el actual propietario del diario, el grupo INDALO del señor Cristóbal Lopez, está considerando la liquidación del Herald. Seguramente influye en esta decisión el hecho de que, a partir de su adquisición por el señor Szpolsky, su posterior venta a Ambito Financiero y luego la adquisición de éste por el actual dueño, la fuente fundamental de ingresos en este lamentable período que era provista por avisos provenientes del gobierno K se ha secado, a partir del cambio de las autoridades nacionales.

El Herald es el segundo diario vivo más antiguo del pais, seis años menor que La Nación. Su primera edición data del 15 de septiembre de 1876, y creemos innecesario recordarles los momentos de gloria y de valentia que ha tenido, y los nombres ilustres que lo integraron. Además, su tradicional defensa de la libertad de las ideas y de los derechos humanos hicieron que, en determinados momentos de la historia, fuera un verdadero paladín del buen periodismo en Argentina.

Crea una gran desazón pensar que ahora, justo en el momento en que nuestro país está siendo reintegrado a toda velocidad a un rol internacional de relevancia, esta valiosa pieza pueda desaparecer. Y decimos valiosa no solamente desde el punto de vista de su valor histórico, sino porque estamos seguros de que podrá jugar un papel verdaderamente útil para el país en este período de reinserción internacional, y en el posterior fuerte crecimiento productivo que se está vislumbrando en el mediano plazo.

Por ésto se nos ha ocurrido intentar una campaña “SAVE THE HERALD”. Somos conscientes de que, con la caida de prestigio que ha sufrido bajo sus últimos dueños, el diario no podría hoy en dia ser autosustentable. Como dice Andrew Graham Yooll, “…it cannot function if not as an appendage of a bigger outfit”.

Y es en ésto que nos dirigimos a Ustedes para solicitarles vuestra cooperación. Por ser todas figuras de gran prestigio y muy conocidas, les pedimos que piensen en personas y entidades que pudieran sentir que se valorizarían incorporando al Herald a su núcleo de acción. Se nos ocurre que no solamente hay que considerar a los medios, sino a organizaciones de las más diferentes índoles, pero que encontrarían en un prestigioso periódico un complemento muy interesante.

Desde ya les agradecemos de todo corazón que se “rompan” un poco la cabeza con este tema y, además, que comenten el mismo entre vuestros círculos de amigos y colegas. Realmente, creemos que aunando voluntades ésta por lejos no es una causa perdida.

Muy cordialmente,

Harry Ingham
isahar6@gmail.com
====================

TUESDAY

1. CRISTINA FERNANDEZ’S RE-EMERGENCE IN MURDER SCANDAL THREATENS NEW ARGENTINE LEADER’S AGENDA (The Washington Times)

2. IN VOLATILE YEAR, SMALLER MARKETS STAND TALL (The Wall Street Journal)

3. ARGENTINE PESO RESUMES SLIDE, WORST EM FX THIS YEAR (Financial Times)

4. ARGENTINE SALES GROW 19.3% IN FEBRUARY, EXPORTS AND PRODUCTION CONTINUE TO DECLINE (IHS Global Insight Daily Analysis)

5. ARGENTINA COULD RAISE PUMP PRICES 6% AGAIN IN APRIL (Platts Commodity News)

6. ARGENTINA TO DEVELOP WEATHER FUTURES CONTRACTS FOR FARMERS (Fox News)

7. FRESH EVIDENCE EMERGING OF IRAN’S DEADLY NUCLEAR AND TERROR TIES TO ARGENTINA (AEI.org)

8. JOURNALISTS AND MEDIA WORKERS IN ARGENTINA PROTEST AGAINST MASSIVE LAYOFFS ACROSS THE COUNTRY (Knight Center Utexas.edu blog)

9. THE CREATIVE PROTESTS OF SEX WORKERS IN ARGENTINA (Open Democracy)

10. AFTER DEAL WITH HOLDOUTS, ARGENTINA MUST CUT DEFICITS, BRING INVESTMENT (PanamPost)

11. AN AMERICAN IN ARGENTINA: BALANCING SCHOOLWORK, TOURIST ACTIVITIES IS A STRUGGLE OF STUDYING ABROAD (The Post, Baker University Center)

1. CRISTINA FERNANDEZ’S RE-EMERGENCE IN MURDER SCANDAL THREATENS NEW ARGENTINE LEADER’S AGENDA (The Washington Times)
By Frederic Puglie
March 6, 2016

BUENOS AIRES — A lurid political scandal that is part soap opera and part murder mystery is thrusting leftist former President Cristina Fernandez back into the spotlight as explosive charges have emerged in the death of a noted prosecutor a year ago.

But the revival of the scandal could also pose problems for new President Mauricio Macri, Ms. Fernandez’s center-right successor, rekindling partisan tensions and old feuds at a time when Mr. Macri hopes to move the country in a radically new direction.

Sensational testimony from a key witness last week put Ms. Fernandez back in the crosshairs of the investigation into the death of Alberto Nisman, the federal prosecutor whose body was found in January 2015 days after he accused Ms. Fernandez of a cover-up of Iran’s suspected involvement in a 1990s terrorist bombing in the heart of the Argentine capital.

Jaime Stiuso, a former high-ranking counterintelligence official who left the country shortly after Nisman’s death, last week told Criminal Judge Fabiana Palmaghini that the prosecutor stood in the way of Argentine-Iranian nuclear collaboration pushed by Venezuelan President Hugo Chavez and that Quebracho — a leftist group with ties to the Fernandez administration, Caracas and Tehran — likely assassinated him.

Nisman’s still-unsolved death ignited one of the biggest political scandals this country has seen in decades. He was found alone in his Buenos Aires apartment dead from a single gunshot to the temple the morning of Jan. 18, 2015, just hours before he was set to detail his case against the Fernandez government to Congress. An autopsy found he had been dead since the previous day.

The spy made his accusations after Buenos Aires chief prosecutor Ricardo Saenz ruled out a suicide by Nisman, and they helped revive the dormant case, which Judge Palmaghini has now turned over to federal jurisdiction.

But the new headlines are also likely to cause headaches for Mr. Macri, whose calls for national unity hinge on support from a congressional opposition dominated by his predecessor’s Front for Victory. A revival of the Nisman saga could bring a quick end to his political honeymoon.

The Nisman saga is picking up steam in the midst of an internal Front for Victory battle between hard-liners determined to derail Mr. Macri and moderates who say they are willing to work with the new president — a division that Sen. Juan Manuel Abal Medina, a key figure within the bloc, acknowledged in an interview with The Washington Times.

Any appetite to set aside partisan bickering could well be diminished if Ms. Fernandez — the subject of several high-profile criminal investigations — is dragged through an embarrassing ordeal like the search warrant executed Friday on her Brazilian counterpart, former President Luiz Inacio Lula da Silva.

Rising anger

Anger over the new testimony seemed to boil over Thursday when Oscar Parrilli, a close Fernandez confidant and Mr. Stiuso’s former boss as head of the Intelligence Secretariat, urged that “they better protect Stiuso, so that what happened to Nisman doesn’t happen to him” — a remark he himself later qualified.

Although insisting that justice must run its course, Mr. Abal Medina questioned why Ms. Fernandez has been directly implicated in so many cases, a circumstance he said pointed to “vindictiveness” within Argentina’s highly politicized judicial system.

“This complicates the situation without any doubt,” the senator said, given that Ms. Fernandez is still the bloc’s “most important” figure. “She is no longer the undisputed leader, but she is not ‘one more voice’” either, he said.

Although Ms. Fernandez’s legal troubles may strengthen the resolve among the most loyal backers of the former president and her late husband and predecessor, Nestor Kirchner, they are also bound to weaken her position within the larger Peronist movement, said Mariano de Vedia, a political analyst for the La Nacion daily.

The Nisman case and other scandals dating back to her tenure “will have a strong impact,” Mr. de Vedia said, noting that a number of Fernandez lawmakers already have deserted to other Peronist factions in the lower house of Congress. “The Kirchnerist movement is not going to have a good time.”

A deep split in the leftist opposition forces could actually play into Mr. Macri’s hands, Mr. Abal Medina said.

“The government’s dream is to divide Peronism,” he said. “And if they achieve that, we will have Macri for a while.”

Meanwhile, the senator — who at the time of Argentina’s 2013 memorandum of understanding with Iran served as Ms. Fernandez’s Cabinet chief — denied the accusations made by Nisman and Mr. Stiuso that the agreement with Iran had nefarious objectives beyond its stated goal of setting up a truth commission to investigate the 1994 bombing of the AMIA Jewish community center.

Cautioning that he had not participated in talks with Tehran, Mr. Abal Medina said he had no indication that the Venezuelan government was involved or that Chavez pushed nuclear cooperation with Iran in any other way. Ms. Fernandez’s intent, he said, was merely to find the culprits of the terrorist attack that killed 85 citizens.

But just that original AMIA investigation, on hold since Nisman’s death, is now once again largely being overlooked amid the intrigue of Mr. Stiuso’s accusations and their political fallout. Mr. de Vedia said he had little hope that the case would ever be resolved.

Mr. Abal Medina, though, insisted that both the investigations of the AMIA attack and the 1992 suicide bombing of the Israeli Embassy in Buenos Aires needed to continue. “We have these two embarrassments in Argentina,” he said. “We want the culprits to pay — whoever they are.”

2. IN VOLATILE YEAR, SMALLER MARKETS STAND TALL (The Wall Street Journal)
By Tanzeel Akhtar
March 6, 2016

ETFs that focus on Argentina, Kuwait and other overseas markets have held up well

The aftershock of China’s stock-market mayhem earlier this year has had a ripple effect across global markets, affecting the U.S. and Europe. And experts say the uncertainty isn’t over.

“We call 2016 the year of volatility, and so far it is playing out according to script,” Adam Patti, CEO and founder of alternative-funds manager IndexIQ, recently told a Charles Schwab virtual panel.

Elections in the U.S. will keep the uncertainty high. So will oil prices, slow growth in China, and U.K. politicians debating whether Britain should exit the European Union.

With that in mind, here are smaller countries, mutual funds and exchange-traded funds that could be a counterbalance for investors when the major markets are rattled.

Argentina’s rally
There are some overseas markets that have avoided the market mayhem—among them, Argentina, Colombia and Morocco. While such frontier markets aren’t for everyone, “Argentina has been one of the few markets that have rallied this year,” says Mark Preskett, senior investment consultant and portfolio manager for fund-tracker Morningstar Inc.

Argentina is included in the MSCI Frontier Markets Index. Mr. Preskett says investors need to be aware that frontier markets are a much smaller universe, which can affect liquidity when it comes to trading shares. “The MSCI frontier-market index has a market cap of $81 billion, compared with the emerging-market MSCI index, which is $3.2 trillion,” says Mr. Preskett.

He recommends considering a broader frontier-markets fund rather than going for direct exposure to these countries. One mutual fund on his radar that fits this bill is HSBC Frontier Markets, managed by Christopher Turner.

The two ETFs Mr. Preskett highlights in this area are Global X MSCI Argentina ETF (ARGT) and iShares MSCI Frontier 100 ETF (FM), traded on NYSE Arca.

Mr. Preskett says the Global X product is the only ETF offering access to Argentina, one of the few equity markets to have delivered a positive return in 2016 as of Feb. 29. The ETF has 32% of assets in the energy sector, 18.5% in financials, 15% in information technology and 12.8% in consumer staples. Top holdings include Tenaris SA, a manufacturer of welded steel-pipe products; MercadoLibre, an Argentine online e-commerce site; and Banco Macro SA, a private bank.

Another reason Mr. Preskett says the Global X Argentina ETF is worth considering: It invests in American depositary receipts of the Argentine companies, which helps with the shares’ underlying liquidity.

On the down side, the ETF is thinly traded. It has net assets level of just $33 million, and trading volumes are very low.

It is also “quite concentrated,” says Mr. Preskett.

“It doesn’t come without risk,” he adds, “but it does give you access to a market which has shown a reasonable level of diversification or independence to other asset classes.”

Kuwait exposure
The iShares MSCI Frontier 100 ETF gives investors broad frontier markets exposure, including a 17% allocation to Argentina. The fund’s biggest allocations by country is a 22% exposure to Kuwait. It also has a 12% exposure to Nigeria. Its largest sector weighting is financials at 51%. For the three years ended Jan. 31, the ETF has a total return of negative 1.43%. The fund had assets about $410 million on March 1.

One new ETF that accesses both the emerging and frontier markets is EMQQ ETF (formally, EMQQ Emerging Markets Internet & Ecommerce ETF), launched by Kevin Carter, chief executive of Big Tree Capital LLC.

This ETF has exposure to Internet companies such as Alibaba in China, Yandex and Qiwi in Russia, MercadoLibre in Argentina and MakeMyTrip in India. Mr. Carter says that of the 48 stocks in EMQQ, 33 are backed by U.S. venture capital and 33 trade on the NYSE or Nasdaq markets.

Mr. Carter says that last year, emerging markets made up 2.5% of the average U.S. investor’s portfolio. He believes in 2016 investors are probably even less exposed to emerging markets than before.

3. ARGENTINE PESO RESUMES SLIDE, WORST EM FX THIS YEAR (Financial Times)
March 7, 2016

The Argentine peso continues to add to its status as this year’s worst performing major emerging market currency.

Despite the country’s central bankers efforts last week to prop it up, the peso has resumed its slide on Monday, falling 1.3 per cent to 15.405 pesos per dollar in the wholesale market, reports Daniel Politi in Buenos Aires.

The drop takes the peso’s rout against the dollar so far this year to more than 16 per cent and has raised the question of whether policymakers will take an even more aggressive stance to prevent the currency from further depreciation as it teeters close to the 16-pesos-per-dollar mark. The answer will come Tuesday night, when it sets benchmark interest rates every week.

February proved to be a brutal month for the peso, with the currency enduring 13 per cent slide against the dollar. This prompted monetary authorities to change tack and late last Tuesday, they hiked the key interest rate by as much as six points to 37 per cent. The move gave the peso some respite, with the currency strengthening to as much as 15.2 pesos per dollar on Friday.

But Monday’s slide underscores how the peso will continue to be under pressure at least until the end of the month, when dollars from Argentina’s agricultural exports should begin flooding the economy. Why? In a word: Inflation. Argentines are hardly new to rising consumer prices but they have been particularly steep after President Mauricio Macri, who took office on 10 December, lifted stringent capital controls—popularly known as the “dollar clamp”—that immediately caused a sharp 30-percent devaluation of the peso.

Official national inflation statistics have not been available for months, but the Buenos Aires city government says prices rose 4.1 percent in January and 3.9 percent in December. So far there is little sign of cooling with private consultants estimating that February inflation will be between four and five per cent. The insistence by government officials that inflation would be between 20-25 per cent this year is looking increasingly unrealistic.

The volatility in the peso market “comes after one victory and two lost battles,” explains Rodrigo Alvarez, the head of Analytica, a local economic consultancy. “The victory was clearly ending the ‘clamp,’ but the government has lost when it comes to inflation and exchange rate stability.” Mr. Alvarez says the Central Bank appears to have been overconfident and “failed to give the adequate signs” and “took too long to react” when the peso kept plunging.

Now the central bank appears eager to keep the peso below 16 pesos. And with good reason. In October, at the height of the presidential campaign, now-Finance Minister Alfonso Prat-Gay said that a dollar at 16 pesos was “very expensive,” characterizing it as a “panic price.”

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4. ARGENTINE SALES GROW 19.3% IN FEBRUARY, EXPORTS AND PRODUCTION CONTINUE TO DECLINE (IHS Global Insight Daily Analysis)
By Stephanie Brinley
7 March 2016

Argentine sales, including heavy vehicles, exports and production, rose 19.3% in February 2016 – a smaller gain than January’s 46.3% increase. Production declined 25.1% and exports 41.5%, according to the country’s organisation of automakers, ADEFA.

IHS Automotive perspective

Significance

Argentine vehicle sales (including light and heavy vehicles) started 2016 with a 46.3% gain. This was followed in February with 19.3%, both in sharp contrast to December 2015’s 25% decline. In February, passenger car registrations rose 48.9% y/y and LCV registrations picked up 67.5%. Production and exports, however, fell 27.1% and 41.5% respectively.

Implications

Argentina has started 2016 with consecutive sales increases. A trade agreement with Brazil has helped, although continuing declines in Brazil prevented that relationship from raising Argentine exports. Brazil, looking to stop declines in its own production output, has proposed a free-trade, rather than quota-based, trade agreement with Argentina and Mexico.

Outlook

Argentina fared much better than expected in 2015 despite a 1% decline, as the industry was supported by more access to foreign currency from the government, once automotive exports to Brazil started contracting. Although Argentina’s uncertainty includes currency devaluation, a new president is in place and the tax on luxury vehicles was eased; IHS expects sales to increase by about 3.5% this year.

Argentina’s Asociacion de Fabricas de Automotores (ADEFA) has published its accounting of February 2016 registrations, production export figures, including light- and heavy-duty vehicles. February sales increased by 19.3%; however, as this was behind the January gain of 46.3%, year-to-date (YTD) sales are up 31.1%. Passenger car sales rose 27.6% in February and light trucks rose 9.9 %, although medium-heavy vehicles declined 59.5%. Production dropped 25.1% and exports declined 41.5% in February.

Ongoing effects of peso depreciation and unstable economic and political situations were generally keeping the market back, after once pushing to become a 1.0-million-unit market by this year. Registrations reached 52,592 units in February, including medium and heavy commercial vehicles. Looking at light vehicle sales only (which accounted for 51,900 units of the month’s sales), passenger car sales in February 2016 reached 38,518 units, or 74% of light-vehicle sales, and light commercial vehicles (LCVs) reached 13,382 units.

ADEFA has not reported manufacturer monthly sales since late 2015. However, according to IHS Automotive data, in 2015 Volkswagen (VW) is estimated to have held the lead and captured 18.5% market share in the light-vehicle market, with 119,795 VW products sold, a gain of 6.3%. Ford sold 93,880 light vehicles in 2015, a 3.0% gain, and 14.5% share. Fiat Chrysler Automobiles (FCA) pulled up to third position, with an estimated 92,128 units sold and 14.3 % share. General Motors (GM) fell to fourth position (87,506 units, up 6.2%). Renault/Nissan (87,106 units, down 2.7%) is behind GM.

Argentine total vehicle production, sales, and exports
February 2016 February 2016 Change % YTD 2016 YTD 2013 Change %
Production 34,174 45,605 -25.1 51,959 71,230 -27.1
Exports 14,178 24,223 -41.5 18,066 31.843 -43.3
Sales 53,593 44,074 19.3 102,158 78,202 31.1
*Includes light- and heavy-duty vehicles, due to ADEFA-52.4 volume reporting limitations.For more accurate light-vehicle comparisons, see IHS Automotive’s Argentine Monthly Market Report.

Export volumes continued to be affected by trade issues and weak demand in Brazil, as that market saw sales fall 25.6% in 2015 (see Brazil: 2 March 2015: and ). February exports did not fall as dramatically as in January, but continue to fall sharply, recording a decline of 41.5%. Argentina extended its quota-based agreement with Mexico until 2019; the agreement caps trade at USD575 million. In January 2016, 82.6% of exports went to Brazil, with 14,930 units shipped to Argentina’s immediate neighbour. In 2015, Mexico was the next-largest export destination, but over the first two months of 2016, more vehicles went to Paraguay.

Production continues to be affected by plant shutdowns. In February, production of light vehicles decreased 25.1% y/y to 34,174 units – for a sixth month, no vehicles were produced in the medium heavy commercial vehicle category. Production of passenger cars in February reached 19,159 units, down 24.6%. Monthly production of LCVs dropped 20.0% y/y to 15,015 units.

Outlook and implications

Argentina fared much better than expected in 2015, despite a 1% decline, as the industry was supported by more access to foreign currency from the government, once automotive exports to Brazil started contracting. Although Argentina’s uncertainty includes currency devaluation, a new president is in place and the tax on luxury vehicles was eased; IHS has increased its forecast for 2016. We now expect sales to increase by about 3.5% this year.

Argentina started out 2015 with a seasonally adjusted annual rate (SAAR) hovering around 500,000 units, and broke the 700,000-mark in the third quarter of 2015. One of the factors improving sales is the government’s efforts to free up more foreign currency, to make vehicles available for the local market and offset some impact of plummeting exports to Brazilian. With more local availability, sales have been positively affected.

New ADEFA president (and president of Ford of Argentina) Enrique Alemany noted that production performance was affected in part by automaker preparations for new models, as well as continued focus on the impact of the recessionary Brazilian market, noting that the weak conditions in Brazil hurt not only export but also production volumes. He has also expressed the need to wait until the end of the first quarter of 2016 to project performance for the year.

The country has elected a new president, Mauricio Macri. Macri was sworn in on 10 December, with initial signals that he will be more supportive of business, including reducing excise taxes on vehicles almost immediately (see Argentina: 30 December 2015: .

A taxation scheme in place from 1 January 2015 raised the minimum cap by 15% and increased vehicle cost. Initially scheduled to end in June, it was extended and the 30% tax level was applied for vehicles priced between ARS195,500 and ARS241,500; vehicles priced below the threshold are taxed at 10%. A 50% tax level was applied to vehicles that cost more than ARS241,500. The first version of the scheme levied higher taxes on vehicles priced over ARS170,000 (USD25,000) to control imports. An additional 30% was levied on vehicles costing ARS170,000–210,000 and 50% on vehicles priced above ARS210,000. These tax rates were adjusted at the end of December 2015, and the luxury tax on new cars costing more than ARS350,000 will fall from 30% to 10% and the tax on luxury vehicles costing more than ARS800,000 will fall from 50% to 20%.

A trade agreement settled between Brazil and Argentina has been renewed through July 2016. However, Brazil’s ongoing declines have prevented the agreement from helping improve Argentine exports to Brazil. Argentina renewed its quota arrangement with Mexico in March, as did Brazil; Argentina trade with Mexico is capped at USD575 million per year through 2019. However, Brazil is suggesting in early 2016 that a fully free-trade agreement be negotiated, and the two countries have agreed to renegotiate the agreement (see Brazil – Argentina: 22 February 2016: ). It is unclear if Argentina will be receptive; it is likely to do more for Brazilian exports than Argentine exports.

Momentum in 2015 fared much better than expected; we had initially projected at 20% drop, but the year closed essentially flat, pulling back just 1%. This was due to automotive exports falling drastically; as a result, the government freed access to foreign currency, which allowed for much better sales. With a new president in place, our new forecast calls for the industry to continue faring better than expected. Among President Mauricio Macri’s first measures was easing restrictions on access to foreign currency, which devalued the currency. This should ease black-market speculation, a contributor to the boom of 2013 and later the bust of 2014. As a result, we now expect the market to see 3.5% growth in 2016, whereas we were previously expecting it to contract.

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5. ARGENTINA COULD RAISE PUMP PRICES 6% AGAIN IN APRIL (Platts Commodity News)
By Charles Newbery
7 March 2016

Buenos Aires (Platts)–7Mar2016/931 am EST/1431 GMT Argentina’s service stations could raise prices in April, the third increase this year, as a weakening local currency erodes profits, Argentine state newswire Telam reported Monday, citing industry experts.

Diesel and gasoline prices were increased 6% over the weekend, in line with a 6% hike in January.

“There will be another tiny adjustment next month, to complete the response to what happened to the dollar,” Luis Malchiodi, head of the Fuel Entities Federation, told Telam.

The peso has depreciated 60% against the dollar since December, pushing up dollar-based costs for service stations and refiners, such as for crude and products.

The 12% increase in pump prices so far this year is also helping service stations contend with a decline in demand as the economy contracts. Malchiodi estimated that consumption in the first two months of this year has dropped 15% from the year-earlier period.

“People are using their cars less,” he said.

Raul Castellanos, secretary of the Chamber of Fuel Dispensers, told Telam that he also expects the increase in April to be 6%.

Service stations are raising prices because the price of oil “has risen in the same proportion as the currency depreciates,” he said.

However, at the same time the government has asked for the increase to be stretched out to minimize the “inflationary effect,” he said.

The government is trying to slow inflation, which has quickened to 30% this year from 26% in 2015.

As part of the price hike in January, the government also cut domestic crude prices 10% to $67.5/b for light crude and $54.9/b for heavier crude to help refiners.

Moreover, it has started to authorize imports of Nigerian Bonny Light this year to also help refiners, given that the plunge in global oil prices has made importing a cheap alternative to make up for any shortfalls in domestic crude supplies. Argentina imported 1.8 million b of crude in 2015, down from 3.7 million in 2014, according to the Energy Ministry.

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6. ARGENTINA TO DEVELOP WEATHER FUTURES CONTRACTS FOR FARMERS (Fox News)
March 7, 2016

Three companies joined forces Monday in Argentina to develop futures contract on the weather, a new financial tool that will allow agricultural producers to cover themselves against the risk of drought.

The development of these contracts will be undertaken as per an agreement signed Monday among Rofex – the futures exchange in the Argentine city of Rosario – and the S4 Agtech and Argentina Clearing companies.

According to a communique released by Rofex, using the so-called IndexS4, agricultural producers will be able to weigh the risk of drought that could devastate their harvests and, thus, hedge themselves against adverse weather events.

In addition, the firm said that the electronic market will provide “transactional procedures that are much more efficient than traditional ones, adding value to agricultural producers and offering the possibility of incorporating small producers not reached by the traditional risk transfer programs.”

The IndexS4 was developed by the S4 technology firm using satellite databases and employing statistics and algorithms.

If a drought negatively impacts production for a given harvest, the index falls below the trigger price stipulated in the contract and an automatic payment is provided to the agricultural producer.

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7. FRESH EVIDENCE EMERGING OF IRAN’S DEADLY NUCLEAR AND TERROR TIES TO ARGENTINA (AEI.org)
By Roger F. Noriega
March 7, 2016

Last week, an Argentine intelligence official testified that Iran sought nuclear technology from that South American country and that a prosecutor investigating suspected Hezbollah bombings in Buenos Aires had been murdered for attempting to expose Tehran’s dangerous plot.

This fresh testimony supports reports I published in July 2011 regarding suspicious nuclear diplomacy in 2007 and a massive cash transfer in 2010 involving then Iranian and Argentine leaders, Mahmoud Ahmadinejad and Nestor Kirchner, respectively. Despite congressional inquiries and mounting evidence, the State Department has chosen to ignore this blind spot in strategy for containing Iran’s illicit nuclear program.

According to the Argentine daily newspaper, Clarin, a former Argentine senior intelligence official, Antonio Stiuso, confirmed in two days of testimony before a judge that the former president of Venezuela, Hugo Chávez, interceded with Nestor Kirchner to resume nuclear cooperation with Iran, which had been suspended in 1991. Also, according to Stiuso’s testimony, Ahmadinejad was interested in using Argentina’s technology to produce plutonium bombs, which he characterized as more sophisticated than the ones Iran was trying to make with enriched uranium.

Stiuso noted that Venezuela did not possess the technical knowledge to make use of the nuclear technology sought by Chávez from Argentina. Instead, because Iran’s nuclear plans were designed by Argentines in the 1960s, Stiuso’s theory is that Tehran was the ultimate beneficiary of such nuclear cooperation.

Stiuso also testified that the former prosecutor, Alberto Nisman, was murdered for refusing an order from former president Cristina Kirchner to cease investigating Iran’s role in the 1992 and 1994 bombings and its corrupt dealings with Argentine officials. In a draft criminal complaint discovered after the prosecutor was found dead last year in an apparently staged suicide, Nisman accused Cristina Kirchner of covering up the involvement of five Iranians who have been charged with planning the 1994 terrorist attack against the Jewish Community Center in the heart of Argentina’s capital city.

In a separate development, last Thursday, Nisman’s family disclosed a written statement by a prosecutor from Argentina’s federal appeals court saying that scientific tests failed to find evidence that he fired the pistol found near his body. This is the first formal statement by a government official confirming suspicions that Nisman was the victim of a homicide.

From the US side, the Obama State Department has systematically neglected the dangerous liaisons among Venezuela, Argentina, and Iran. As dramatic evidence of Iran’s deadly provocations in our own neighborhood continues to come to light, it is fair to ask whether its cluelessness was by accident or design.

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8. JOURNALISTS AND MEDIA WORKERS IN ARGENTINA PROTEST AGAINST MASSIVE LAYOFFS ACROSS THE COUNTRY (Knight Center Utexas.edu blog)
By Paola Nalvarte
March 7, 2016

Hundreds of Argentinian press and media workers gathered in the streets of Buenos Aires on March 3 to protest mass layoffs affecting their industry, according to news portal La Izquierda Diario.

The mobilization was organized by the Press Union of Buenos Aires (Sipreba for its initials in Spanish), along with the workers of Radio América, Tiempo Argentina and media company Grupo 23, who have not received their salaries since December 2015.

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One of the main reasons for the protest was the dismissal of 136 workers of a total 160 employed at news channel CN23, which was part of the dismembered media conglomerate Grupo 23, and is now owned by Cristóbal López’s Grupo Indalo. The mass dismissal was repudiated by civil society, journalists and various institutions in the country, like the Argentinian Journalism Forum (Fopea for its initials in Spanish).

The protesters reached the capital’s main square, Plaza de Mayo, in front of the headquarters of the Cabinet of Ministers, to demand action from current Chief of Staff Marcos Peña, given little response of the Ministry of Labor in the case of CN23. According to Sipreba, Sergio Szpolski, one of the owners of Grupo 23, and his partner Matías Garfunkel, have been favored in this case.

Gabriel Michi, journalist from Radio América and CN23, told the Knight Center for Journalism in the Americas that Grupo 23, which has almost 800 employees in its workforce, received a total of official advertising valued at about US $80 million from 2009 to 2015 when Szpolski and Garfunkel owned the company.

Compared to other media, those of Szpolski’s media group received the most government advertising during the previous government, Michi said. In 2015, Szpolski participated in the provincial municipal elections in Buenos Aires for the Front for Victory party, which was an ally to the ruling party at the time.

However, Michi added that even though the media of Grupo 23 had an editorial line that was not very critical of the previous government, its workers “always defended the most important values of the press,” doing their job professionally.

Michi also explained that many interpreted it as a true “hollowing out of the media,” also referring to the massive layoffs in the case of Grupo 23 that have been occurring since the electoral victory of opposition party presidential candidate Mauricio Macri.

Since then, Michi said, Szpolski and company began to get rid of some media in the group, stopped paying its suppliers and the salaries and bonuses of their employees.

The dismissed press workers, and those who continue working without receiving salaries, also have the support of the Argentine Federation of Press Workers (Fatpren for its initials in Spanish), which called for the intervention of the Ministry of Labor, Employment and Social Security of the Nation to ensure employment for the journalists.

“We call on media owners to act responsibly, respecting labor rights of the workers and guaranteeing the continuity of employment,” Fopea demanded through a press release, through which the organization also urged the relevant authorities to take necessary actions to prevent the continued “hollowing out” of the media by owners.

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9. THE CREATIVE PROTESTS OF SEX WORKERS IN ARGENTINA (Open Democracy)
By Georgina Orellano
8 March 2016

Sex work in Argentina is legal, but since 2011 the anti-trafficking agenda has increasingly threatened that status. This has led to new alliances and strategies of resistance among sex workers there.

The Women’s Sex Workers organisation of Argentina AMMAR was born in 1995 as a consequence of the criminalization of sex work in public spaces in Capital Federal, a subsidiary of Buenos Aires. We sex workers organised ourselves to fight for our rights after having been subjected to all kinds of abuse, including exclusion, discrimination, and being treated as outcasts. Months later we joined the Argentinean Workers’ Central Trade Union, where we remain active to this day, and in 1997 we became a part of the Network of Women Sex Workers from Latin America and the Caribbean (RedTraSex).

It is said that Argentina has officially adopted an abolitionist approach, meaning that in principle it does not criminalise the exercise of prostitution per se, but rather the third parties that exploit the prostitution of others. Brothels were prohibited in 1936 by law 12.331, and subsequent legislation has effectively criminalized those who exercise sex work in the street and private spaces in 19 provinces. This demonstrates the thin boundaries between the abolitionist and prohibitionist models.

In Argentina, sex work is exercised in private apartments, pubs and dance clubs, on the street, autonomously, and through third parties. In some cases we experience labour exploitation – the same can be said for many other workers – and the lack of regulation of our activity exposes us to persecution and police abuses. In order to fight for our rights, our organisation has adopted a series of strategies, including a law proposal; working on building political alliances; offering day to day assistance in legal and health matters; and handing out condoms. We also spread our initiatives, such as public protests or debates, through our own social networks and public media. One of our most recent initiatives has been the creation of the Observatory on Institutional Violence against Sex Work and the launch of a hotline through which sex workers can lodge complaints of institutional violence.

AMMAR also functions as a trade union although it cannot legally be one, given the lack of regulation of sex work. This way of self-organisation allows us and our 6000 affiliates to emphasise the fact that we are workers. It has also given us a structure in seven provinces, where our representatives are chosen by our comrades. To do this work we are supported by several international agencies, including the Global Fund to Fight AIDS, Tuberculosis and Malaria, the Red Umbrella Fund, the Friedrich Ebert Foundation, UNAIDS, and the Levi Strauss Foundation.

Fighting the regressive trend

It is important to highlight that, since 2011, a powerful lobby against trafficking has been installed in Argentina, together with new laws that do not differentiate human trafficking from sexual exploitation and sex work. These policies were aimed to tackle the sex market as a whole and we, the ‘vulnerable women’, didn’t know how to move against such a big monster that was coming to take away our voices and occupy our political spaces. On 5 July 2011, President Cristina Fernández Kirchner signed Decree 936, which prohibited the publishing of sexual services in advertisements.

With a stroke of her pen she restricted the freedom of speech of thousands of us in a full democracy. We were never invited to discuss this legislation. Afterwards, sex work venues started getting shut, province by province, through actions carried forward mainly by those female legislators and abolitionist organisations leading the charge against trafficking. In 2012, another policy designed so as to control human trafficking required people from the Dominican Republic to get a visa in order to have legal permission to enter the country.

The phones at AMMAR didn’t stop ringing, but it wasn’t the press who wanted to hear our opinion on these new policies – it was our comrades. We realised we were dealing with an unwavering political decision, and so we set to work organising our colleagues. Thanks to these new policies there are now many more organised sex workers in Argentina. What a paradox: we were prohibited from exercising sex work, but we became organised as sex workers.

New laws, new alliances, new tactics

Knowing that we had increasingly fewer spaces in which to work without being threatened by closures and legal sanctions, we accelerated the process to present our own law proposal. We finished in October 2013. It is based on the premise that the Argentinian state does not consider sex work an illegal activity. Following this, it proposes to regulate sex work in the country by providing legal age sex workers – including transgendered and migrant workers – with labour rights such as the access to retirement funds and health benefits. It also includes a way to licence locations for sex work that meet supervision, health, and hygiene requirements.

At first, we presented our proposal by ourselves – no other organisation or labour union supported our demands. On the contrary, the campaign against prostitution had become so strong that our own comrades, who had witnessed the organisation’s birth and growth, started questioning our demands. We went in search of new directions, but we stumbled upon such seasoned and academic feminism that we left frightened, believing that even feminism wanted to decide over our bodies.

For a long time we stayed away from those spaces. But one day, as the raids, closures, and anti-sex work propaganda continued unabated, two anthropologists shyly showed up to our organisation with a proposal. They wanted to help us keep record of the institutional outrage we were experiencing. At first, we hesitated, we distrusted, but then we agreed and were not mistaken: they brought us back to spaces we had abandoned, they showed us another feminism – one that supported us.

We proposed new alliances. We won the support of the LGBT community, amongst them many trans sex workers. They were followed by a queer group, which supported us as representatives of a fellow minority persecuted because of our sexuality, and by labour unions that recognised us as workers, some of which are members in the Argentinean Workers’ Central Trade Union. Together with these organisations we repeatedly campaigned for our labour rights in public places, persevering even though we often received reactions that felt like slaps in the face.

We didn’t give up and decided to carry on with a different kind of action: issuing bills for our services, as if sex work was a legal category. The bill is the symbol for formalised, legal work in our country and that is why we carried out a campaign on May Day 2015 – Worker’s Day – of billing our sex services to recognised politicians and journalists. We wanted to demonstrate that our access to labour rights was possible without changing the entire law, just by adding the category of sex work onto the Labour Department’s register.

The results were better than we could have expected: politicians who hadn’t listened to us before received us and the media covered our demands for labour rights as a relevant topic. The billing campaign won the EIKON 2015 communications award from the Imagen magazine (a Spanish-language public relations and communications magazine).

We have not yet succeeded in having sex work included on the Labour Department’s register, but, unsure of what the political context will look like in the future, we keep fighting. We also plan the presentation of a new national ‘law project’ to regulate autonomous sex work and battle against new local policies, such as fines for sex work clients in the capital of the province of Mendoza. There have been plenty of bad reactions to our activism, but we haven’t remained still and have actually become even stronger. Here we are, many more voices demanding access to labour rights.

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10. AFTER DEAL WITH HOLDOUTS, ARGENTINA MUST CUT DEFICITS, BRING INVESTMENT (PanamPost)
By Luis Enrique Ponce Goyochea
March 7, 2016

President Macri’s Recent Success in Striking a Deal Unveils Larger Challenges Ahead

Argentina and its main international creditors have finally settled a long-held dispute over the repayment of defaulted sovereign bonds by closing a deal worth USD $4.65 billion.

At first glance, Argentina’s agreement with the holdouts to put an end to almost fifteen years of default seems a major victory; the country can now issue debt at lower interest rates in international financial markets.

This, however, is merely what is apparent: Argentina can indeed look forward to finally returning to the league of emerging markets, leaving behind its dark years as a peripheral market in the global economy.

Such an upgrade should allow Argentina to issue sovereign bonds at lower interest rates given the lower risk of default attached to its sovereign debt. Argentinean companies looking to issue corporate debt will also benefit, since they will access international financial markets at a lower price.

Nevertheless, we still have to take into account “what is not seen”, as French economist Frédéric Bastiat would remind us.

In this case, Argentina’s ability to access lower interest rates is not an end in itself. In essence, it is a means for the country to eventually return to the map in terms of strategic international relations. It is likely, for instance, that President Mauricio Macri’s government can now actively reestablish bilateral and multilateral trade agreements with the United States and the European Union.

In this sense, the ultimate and most relevant goal — a goal which often remains “unseen” — is economic freedom through greater openness in trade. Commerce with other nations, after all, has historically led to progress.

Isolation from global markets, on the other hand, leads to the decline of any institutional order and to a deteriorated business environment. The higher the risk attached to the country, the lower the flows of investment.

This is precisely what caused Argentina to fall into the group of so-called frontier markets in the first place, sharing a place alongside countries with such poor credit records that they inevitably needed to pay very high interest rates to access financial markets.

Simply put, common sense dictates that nobody would seriously make loans to any individual, company or country that is quite unlikely to properly honor debts.

Argentina, for instance, has defaulted four times over the past three decades: in 1982, after the policies of de facto finance ministers Martínez de Hoz and Lorenzo Sigaut; in 1989, after the Austral Plan launched by former president Raúl Alfonsín (1983-1989), who paved the way for hyperinflation and the advent of the convertible peso by virtue of the 1991 peso Convertibility Plan; in 2001, after the fiscal crisis leading to the first official devaluation of the formerly convertible peso; and Cristina’s Kirchner declaration of war on the “vulture funds” in 2014.

Such an unstable credit record clearly shows a roller-coaster pattern for Argentina, as the country is going into default once a decade on average.

In terms of private equity: who would seriously invest in a company which is most likely to go bankrupt every ten years? Not only would it have practically no access to financial markets, it would no longer even be in business.

Furthermore, it is certainly unsustainable for any kind of individual, company or country to systematically attempt to live beyond their means. Obviously, Argentina is no exception to this iron rule of business and finance.

So although Argentina’s newfound access to financial markets constitutes a major step forward when it comes to putting the country back on the global economic map, we will not overcome stagflation — that is,the current simultaneously high levels of inflation and unemployment, along with declining levels of productivity — by increasing levels of debt and public spending .

The government should rather concentrate on reducing public spending and, especially, on not allowing public sector squandering to push away private investment. Clearly, there is no such thing as as the “multiplier effect” of public spending, a notion dear to Keynesian mythologists.

On the contrary, the evidence shows that increasing levels of public spending is neither sustainable nor cost-effective, since this eventually leads to unsustainably high levels of budget deficits. And deficits end up destroying any country´s currency since they lead to hyperinflation because they are usually financed through money inflation. It is by systematically printing out domestic currency bills that supposedly independent central banks make up for large fiscal imbalances.

In Argentina’s case, the record is rather sad. Governments destroyed four national currencies in less than three decades, between 1969 and 1992. These are the peso moneda nacional (1969), the peso ley 18.188 (1983), the peso argentino (1985) and the austral (1991). The current peso is the fifth currency in Argentina´s monetary history.

The bottom line is that any agreement reached an that takes a country back to international credit markets is positive. But we should concentrate on the even more relevant goal of reducing and eliminating any budget deficit, since this is the true threat to a country´s sound currency and, hence, to its economy.

We should also try to bring in investment and increase international trade, which would lead to a boost in Argentina’s long-term productivity levels and in its general prosperity.

11. AN AMERICAN IN ARGENTINA: BALANCING SCHOOLWORK, TOURIST ACTIVITIES IS A STRUGGLE OF STUDYING ABROAD (The Post, Baker University Center)
By Melanie Umbaugh
March 7, 2016

I finally feel more or less adjusted to life in Buenos Aires. I’m not an expert, but I know my way around my neighborhood and my university. The city feels familiar enough now that I don’t feel like a total stranger strolling through the streets. A couple people at restaurants and cafes remember me; I’m almost a regular. I’m fitting in in Buenos Aires.

At the same time, I feel like I’m not doing enough. I don’t want to fall into a routine and forget to keep visiting new sites and trying new things. I’ve been here for a month, and I’ve loved it, but it has also passed by so quickly. Every day I don’t do something new feels almost like time wasted. I think in working to adapt to everyday life, I’ve forgotten to be a tourist, too.

Of course, I’m still a student while I’m here. I still have homework, and (although it seems like most Porteños don’t), I also still need to sleep sometimes. My time is not an endless stretch of opportunity and discovery. And some days, it’s exhausting adjusting to a new culture or navigating a tricky situation in an unfamiliar language, so I don’t take the time for that museum visit or tourist site. I have to remind myself that those times aren’t totally wasted. This column is a reflection on my own concerns about missing out, but also a pseudo-permission slip to take that extra time for myself when I need it.

The regular semester is about to start here in Argentina, and I’m looking forward to having a normal university schedule again. I also plan to make more of an effort to keep exploring and keep experiencing. I’m lucky to have four more months here, and that’s not nothing. The first phase of my time here is complete, and I’m going to make sure that the next phase is just as exciting.

So far in Buenos Aires, I’ve toured historic neighborhoods and a grand theater-turned-bookstore. I saw a Frida Kahlo painting in person for the very first time and was enchanted. I’ve spoken in Spanish more than ever before in my life, and I’ve even picked up the Buenos Aires dialect.

This is the farthest from home I’ve ever been, and it’s still exciting, but it’s also starting to feel like another home — just like Athens became my second home freshman year of college. I hope Buenos Aires can feel that way, too.

I have so much more to do, and I’m going to see so much more of this country — but it’s also nice to remember that I don’t have to do absolutely everything in order to have a great experience here. Living here and being here is already so much, four more months can only add to my love for this city and this time.

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ARGENTINE UPDATE – Mar 4, 2016

5 marzo, 2016

1. EDITORIAL-OPINION: TRUE ‘DIGNITY’ IN ARGENTINA (The Washington Post)

2. ARGENTINE NOBEL PRIZE WINNER TO OBAMA: DON’T VISIT MARCH 24 (The New York Times)

3. HOW ELLIOTT EARNED BILLIONS ON ARGENTINE BONDS AT 101% INTEREST (Dow Jones Institutional News)

4. ARGENTINA’S DEBT: AT LAST (The Economist)

5. AND THEN THE BEETLES SHOW UP IN ARGENTINA (American Thinke

1. EDITORIAL-OPINION: TRUE ‘DIGNITY’ IN ARGENTINA (The Washington Post)
4 March 2016

TODAY’S LESSON in responsible democratic leadership comes to us from, of all places, Argentina. For most of the 21st century – and the 20th, for that matter – Buenos Aires has been the setting for serial populist misadventures, most recently under President Cristina Fernà¡ndez de Kirchner, who brought her country double-digit inflation, spectacular public corruption and costly strife with the democratic West during two four-year terms that mercifully ended in December. Her successor, Mauricio Macri, is showing himself to be made of more pragmatic stuff, most recently by reaching a settlement with Argentina’s foreign creditors as per his campaign promises.

Those creditors are hardly sympathetic figures. They consist in large part of U.S. hedge funds that bought up distressed Argentine bonds left out of the country’s two previous restructurings of $100 billion in debt (on which it defaulted in 2001), betting U.S. courts would force Ms. Kirchner to honor them at face value and deliver a windfall. Despite a monumental propaganda campaign by Buenos Aires against these “vulture funds,” they did, indeed, have the law on their side, as a New York federal judge repeatedly found. Ms. Kirchner’s efforts to resist payment anyway merely prolonged Argentina’s exclusion from international financial markets and, accordingly, her country’s economic instability.

In agreeing to buy out the hedgies for approximately $4.7 billion, or about 75 percent of their maximum claim, Mr. Macri effectively declared that Argentina will put its tangible long-term economic interests over the crowd-pleasing abstractions, such as “dignity,” upon which Ms. Kirchner invited her people to feast. He faces a challenge in getting the settlement approved by Argentina’s National Congress, where Ms. Kirchner’s Peronist party and its allies still enjoy considerable power. But an increasing number of opposition lawmakers seem to realize that the burden on those who vote “no” would be heavy, given the strong personal mandate Mr. Macri won in December and the prospect he offers of finally ending this losing battle and moving on.

After years in which their leaders have bombarded them with rhetoric to the effect that they need never make any such hard choices, what Mr. Macri is essentially asking Argentines to do is accept an imperfect, even bitter, reality and to make the best of it. Sometimes, this is a leader’s duty, and Mr. Macri deserves credit for taking it on. And if Argentina’s chronically erratic democracy can indeed sober up, cut its losses and follow the rule of law, while restoring prosperity, then its example may inspire similar change across the hemisphere, from Caracas to Havana.

Come to think of it, we know of some North American politicians who could learn from such an example, too.

2. ARGENTINE NOBEL PRIZE WINNER TO OBAMA: DON’T VISIT MARCH 24 (The New York Times)
March 2, 2016

BUENOS AIRES, Argentina — In a sign of growing discontent over a visit by President Barack Obama, a former Argentine Nobel Prize winner says the U.S. leader should skip his planned March 24 visit to the country because it’s the 40th anniversary of a coup that installed a military government that had U.S. backing.

Adolfo Perez Esquivel, who won the prize in 1980 for his defense of human rights during Argentina’s 1976-1983 dictatorship, told The Associated Press that he plans to publish an open letter this week. Esquivel and Obama know each other through the Nobel Prize; Obama won it in 2009. Esquivel said the two had communicated before over human rights issues, including the indefinite detentions of prisoners at the U.S. naval base Guantanamo Bay.

Esquivel said he welcomes Obama, and thinks it’s great that an American president wants to better get to know people in Latin America. However, he should not visit on March 24, Esquivel said. On that day in 1976, the military staged a coup. Human rights groups estimate that 30,000 people were killed or disappeared during the 1976 to 1983 military government.

“I’m a survivor of that era, of the flights of death, of the torture, of the prisons, of the exiles,” said Esquivel, sitting in his office. “And when you analyze the situation in depth, the United States was responsible for the coups in Latin America.”

Obama, after visiting Cuba, plans to arrive in Buenos Aires on March 23, and be in the country on March 24. Since the visit was announced several weeks ago, many human rights groups have voiced opposition to an American president being in Argentina on that day.

They argue that military governments across the region flourished thanks to backing by the U.S. during the Cold War with the Soviet Union. They point to declassified U.S. State Department documents that indicate Henry Kissinger, America’s former secretary of state, gave his approval to the generals to implement “dirty war” tactics for the sake of civil order.

Argentine President Mauricio Macri, a conservative who ran on promises to improve relations with other nations, particularly the United States, has tried to dampen the controversy. He has met with human rights groups and argued that the visit won’t take away from commemorative events. But activists have not been swayed.

Obama “is the false face of the Nobel Prize and we believe there are many things he should pay for,” said Hebe de Bonafini, president of iconic human rights group Mothers of Plaza the Mayo. “We don’t want him here.”

The U.S. ambassador to Argentina, Noah Mamet, told the Clarin newspaper that Obama had to come on those days because they wanted to combine the visit with the trip to Cuba on March 21-22.

“The United States government shares with Argentina the defense of human rights as a universal principal,” Mamet told the paper.

The U.S. Embassy did not respond to requests for more comment.

“I think it’s great (for Obama to come),” said Esquivel. “The question is when and how.”

3. HOW ELLIOTT EARNED BILLIONS ON ARGENTINE BONDS AT 101% INTEREST (Dow Jones Institutional News)
By Julie Wernau
3 March 2016

How did Elliott Management Corp. manage to make 10 to 15 times what they paid for some Argentine debt?

Simple: They bought at a steep discount millions of dollars in bonds that earned 101% interest per year. (No, that’s not a typo).

Here’s why:

Usually, when bonds default, back payments are calculated at a bond’s coupon rate, plus a statutory penalty of 9% per year on unpaid interest after the bonds mature.

These bonds, the brainchild of Morgan Stanley , were unusual. Called floating rate accrual notes (FRANs) the coupon rates adjusted according to Argentina’s creditworthiness.

“This structure arguably provided an incentive for those who were familiar with Argentina’s troubled financial history and, as result, concerned about a potential default nevertheless to invest in the FRANs, ” the U.S. Court of Appeals for the 2nd Circuit later wrote in a decision upholding the absurdly high interest rates.

Until Argentina’s default in 2001, these bonds (which had a maturity date of 2005), paid investors a different amount every six months calculated by the yield that Argentina’s 2006 and 2027 benchmark bonds were trading at in the secondary market.

Interest rates rose from between 9% and 14.4% per year prior to October 2001 and payments were made accordingly.

Then everything changed. On December 20, 2001, Argentina announced that it would no longer service its approximately $80 billion in external debt, including both the FRANs and the 2006 and 2027 bonds whose yields to maturity were used to calculate the FRANs coupon rates.

The yield on the benchmark bonds rose to 101%. Elliott successfully argued in court that after Argentina stopped paying (and therefore calculating interest), the back payments it was owed were also accruing at 101%.

The net result: In a deal reached this week, Elliott stands to gain $1.2 billion on $132 million in principal on those bonds – although analysts agree that they likely paid much less than the full value of those bonds, about 20 cents on the dollar. With all penalties included, according to court documents, the return amounts to 905% based on the original principal, but analysts say it is likely 10 to 15 times what the hedge fund actually paid for the debt.

4. ARGENTINA’S DEBT: AT LAST (The Economist)
5 March 2016

A deal with holdout bondholders is expensive, but worth it

FOR more than a decade Elliott Management, the hedge fund led by Paul Singer, was the pantomime villain in Argentina’s dispute with its bondholders. Rather than accepting a big write-down of debt on which the country had defaulted, as other creditors did in 2005 and 2010, Elliott, along with several other “holdouts”, pursued full payment through the New York courts. That led to a fresh default in 2014.

Now the drama is entering its final act. On February 29th Daniel Pollack, the court-appointed mediator, announced that Argentina had reached an agreement in principle with four of the largest creditors, led by Elliott. Argentina’s payment of $4.65 billion will be 25% less than they were demanding. Even so, it is a big pay-off for investors who bought the debt at a fraction of its face value. With this agreement, Argentina has settled with creditors who hold 85% of the disputed debt.

It is a coup for Mauricio Macri, Argentina’s recently elected president and will help end the country’s long isolation from the international credit markets. Together with other steps Mr Macri has taken since assuming office in December, including relaxing exchange controls and removing taxes on some exports, the credit deal helps restore normality to an economy that had been distorted by populist controls during 12 years of rule by his two Peronist predecessors, Cristina Fernández de Kirchner and her late husband, Néstor Kirchner. Addressing Congress, which began its new session on March 1st, Mr Macri blamed his predecessors for Argentina’s weak economy and high inflation. Isolation from credit markets, he declared, had cost the country $100 billion and 2m jobs.

Argentina’s negotiators paved the way back by reaching deals with smaller groups of holdouts. On February 2nd Argentina agreed to pay a group of Italian bondholders $1.35 billion; two weeks later it settled for $1.1 billion with two of the six largest holdouts, Montreux Partners and EM Ltd. But Mr Singer’s Elliott Management led the most intransigent group; an agreement with them is the real prize.

Thomas Griesa, the judge overseeing the case, had contributed greatly to Argentina’s predicament in 2012 when he ruled that the country could not pay bondholders who had agreed to a restructuring, or issue new debt, unless it settled with the holdouts. That precipitated Argentina’s default. On February 19th this year the judge in effect switched sides, saying that Mr Macri’s election had “changed everything”. He said he would lift the injunction barring Argentina from paying other creditors from March 1st under certain conditions. That was a severe blow to the holdouts, who had used the injunction to press Argentina for full payment. “The message to non-settling plaintiffs, many of whom have had no opportunity to negotiate with anyone, is unmistakable: settle by February 29th, or else,” wrote their lawyers.

The deal is not quite sealed. The injunction will not be lifted until Argentina repeals two laws that block agreements with the holdouts. The Ley Cerrojo (Padlock Law), enacted in 2005 during the first round of debt restructuring, was intended to prevent Argentina from offering holdouts a better deal than that accepted by holders of restructured bonds. The Ley de Pago Soberano (Sovereign Payment Law) of 2014 was a failed attempt to circumvent Mr Griesa’s injunction by re-routing payments to bondholders who had accepted a deal through Argentina or France.

Opening the lock

The government is confident that it can secure the votes in Congress to repeal the laws. In early February, 13 deputies from the Front for Victory (FPV), Ms Fernández’s party, broke away to form a more moderate “Justicialist Bloc”. The move deprived the FPV of its position as the largest grouping in the lower house. The defectors have said they are willing to work with the new government to repeal the laws. In the upper house the government plans to enlist the support of Peronist governors, who are also keen to tap international credit markets. They are likely to persuade the senators over whom they have influence to support the repeal of the legislation.

Once the laws have been scrapped, the government hopes to raise up to $15 billion through a bond issue, which it will use to pay the creditors. Some analysts doubt that the market can absorb such a large sum. But Argentina’s finance secretary, Luis Caputo, is bullish. “All the banks we’ve spoken with are confident that we can raise the money we need in the market,” he said.

The government then plans to return to the market in an effort to finance its budget deficit, which was a daunting 5.8% of GDP last year. Under Ms Fernández’s administration the central bank financed the deficit by printing money, pushing up inflation. The bond issue will help the central bank to end that harmful practice, but the relief from high inflation will not come immediately. Propelled by the devaluation of the peso, the annual inflation rate, already high, has risen to around 30%; the government had hoped inflation this year would be 20-25%. It is trying to persuade trade unions not to demand excessive wage rises, which would drive inflation even higher. The unions are unwilling to make sacrifices, however. On February 25th teachers extracted an agreement from the government for a 30% salary increase; other unions are demanding pay rises at least as big.

Mr Macri has so far taken a cautious approach to bringing down the budget deficit. Energy subsidies have been cut, but the president is reluctant to slash other spending, which would further rile Argentines already angry about inflation and, he fears, would weaken growth and employment. But until the government brings the deficit substantially down, the central bank will struggle to regain credibility. A return to the bond markets is not enough.

Nevertheless, the debt deal should boost the government’s confidence. It has until April 14th to repeal the legislation and pay Elliott and its fellow litigators. It must also settle with the holders of the remaining 15% of the debt. But the exhausted negotiators are allowing themselves a moment of satisfaction. “It seemed like a thousand years to me,” Mr Pollack said of the seemingly interminable talks. Mr Macri hopes not to take up much more of his time.

5. AND THEN THE BEETLES SHOW UP IN ARGENTINA (American Thinker)
By Silvio Canto, Jr.
March 4, 2016

Argentina has been in the news a lot. The Pope was born there and recently returned home. And they had an important election in early December. It put in office a center-right president who is already paying off dividends with sound policies and a recognition that Argentina’s populism hurt its international reputation.

Over the last few weeks, people in Argentina are wondering about something rather different. Some are asking: Is the end of the world coming?

This is from news reports:

A beetle invasion of biblical proportions has hit beaches in Argentinian seaside resorts — causing some to suggest it could mean the end of the world.

Locals reacted with horror after seeing millions of the bugs swarm onto beaches in the resorts of Mar de Ajo, 31 miles away from the capital Buenos Aires.

In scenes akin to a horror film, images posted on social media show the beaches turned black by the plague of beetles as they cover miles of coastline.

Although no one is exactly sure what is behind the phenomenon, social media has gone into meltdown with theories.

Some believe it is a portent of the end of the world with commentators claiming the influx of beetles is an “ominous warning of impending doom” and “the end of times is near… they can sense it.”

Others suggested an earthquake had hit the area before the beetle invasion.

It may be that true there is doom ahead for Argentina, as many are saying. It is more likely that this is a freak act of nature. Nevertheless, reaction to the beetles have a lot of people talking about the state of the country.

I checked with a social friend in Argentina about the story. And this is sort of what he said: “We love “futbol” and we got eliminated in the World Cup, our tango is getting mixed with pop music and most of us feel cursed that Argentina has underachieved for a century.”

And then the beetles in biblical proportions show up? My friend from Argentina may have a point about doom ahead!

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ARGENTINE UPDATE – Feb 29 & Mar 1, 2016

3 marzo, 2016

Wednesday

1. SMALL BONDHOLDERS TRY TO STALL ARGENTINE DEAL (The Wall Street Journal)

2. ARGENTINA’S HEDGE FUND DEAL FRUSTRATES SMALL BONDHOLDERS (The New York Times)

3. ARGENTINA NEARS $15BN BOND ISSUE IN RETURN TO CAPITAL MARKETS (Financial Times (FT.Com))

4. THE END OF THE ARGENTINE DEBT IMPASSE IS IN SIGHT; MACRI HAS SCORED A SUCCESS BUT THE PRESIDENT STILL HAS MUCH TO DO (Financial Times)

5. THE ARGENTINA COMEBACK; MACRI LEADS HIS NATION TOWARD A RETURN TO GLOBAL CAPITAL MARKETS (The Wall Street Journal Online)

6. ARGENTINE PRESIDENT: NATION IN BAD SHAPE BUT CHANGE COMING (The New York Times)

7. SINGER TANGO BRAVO ARGY MESS TAMED (New York Post)

8. DEBT DEAL BATTLE BEGINS IN ARGENTINA (Financial Times)

9. CLOCK TICKS AS ARGENTINA’S MACRI ASKS CONGRESS TO OK CREDITORS DEAL (Reuters.com)

10. SOVEREIGN DEBT: ARGENTINA REACHES A DEAL WITH ITS CREDITORS (The Economist)

11. HEDGE FUND CREDITORS’ DEAL WITH ARGENTINA SETS ALARMING PRECEDENT (The American Prospect)

12. ARGENTINA AFTER KIRCHNER: MACRI REFORMS, CONGRESS RETURNS (The National Interest)

13. ARGENTINE JUDGE DECLARES HERSELF ‘UNFIT’ TO TRY NISMAN CASE (Associated Press)

14. ARGENTINE CREDITORS ASK U.S. JUDGE TO WAIT ON LIFTING INJUNCTIONS (Reuters News)

1. SMALL BONDHOLDERS TRY TO STALL ARGENTINE DEAL (The Wall Street Journal)
By Julie Wernau
2 March 2016

Representatives of hundreds of holders of defaulted Argentine debt descended on a New York courtroom on Tuesday, trying to stall a recent settlement between the country and U.S. hedge funds.

While these smaller bondholders could delay a final agreement between the Argentine government and the hedge funds, they aren’t expected to derail the deal, attorneys and analysts said.

Representatives pleaded with a New York federal court judgeto allow them more time to negotiate for payment with Argentina, which defaulted on its debt 15 years ago.

Smaller bondholders in the case — one of the longest and most litigious sovereign-debt battles in history — say they have been sidelined in the negotiation process by the large hedge funds and have asked the judge to allow 30 more days for negotiations, or pledged to appeal the judge’s decision to a higher court.

These individual investors, mostly from Argentina, are at a disadvantage in getting the country to offer a deal similar to the one it agreed on with the hedge funds on Monday. Hedge funds must be paid by April 14 or the deal is off.

Following intense negotiations, the government agreed in principle to pay $4.65 billion to Paul Singer’s Elliott Management Corp. and three other hedge funds to settle their claims on the country’s defaulted sovereign bonds, signaling a likely end to a stalemate between Argentina and 65% of its holdout bondholders following intense negotiations.

Jessica Sleater, partner at Andersen Sleater, LLC in New York, told U.S. District Court Judge Thomas Griesa the largest holder she represents is a 90-year-old man who hoped to use the bonds he bought from Argentina in the 1990s to support himself. He has had a judgment in place since 2007 and has yet to be paid, she said.

“We have received no word at all from Argentina,” she said.

The judge adjourned the hearing, pending his decision.

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2. ARGENTINA’S HEDGE FUND DEAL FRUSTRATES SMALL BONDHOLDERS (The New York Times)
By Alexandra Stevenson
2 March 2016

Argentina’s offer to pay billions to settle a dispute with a group of hedge fund investors led by the billionaire Paul E. Singer may have been a victory for both the South American nation and the hedge funds, but it has left many small bondholders out in the cold.

Lawyers for bondholders that were not included in the $4.65 billion deal Argentina made with the holdout hedge funds have argued that they will get far worse terms if they agree to a separate $6.5 billion proposal that Argentina made on Feb. 5.

Mr. Singer’s NML Capital will have made about 369 percent, or $2.4 billion, on defaulted bonds whose principal value was $617 million, according to data from the finance ministry of Argentina that was filed to the court on Monday. Bracebridge Capital, another holdout hedge fund, will be paid $1.15 billion, representing a 952 percent return on bonds with principal worth $120 million, according to the data.

On Tuesday, the Federal District Court in Manhattan heard from the lawyers of individual investors, most of whom bought Argentine bonds before the country’s colossal debt default in 2001.

One lawyer, Jessica J. Sleater, spoke of a 90-year-old client who bought Argentine bonds in the 1990s for ”patriotic” reasons and has still not been repaid. Her client, who is partly paralyzed, had planned to use money from the interest to pay for costs associated with his disability, she added.

These investors, like the big hedge funds, are known as holdout investors because they have refused to take part in two debt restructurings by Argentina after the country defaulted in 2001.

”We stand ready, willing and able” to negotiate with Argentina, Ms. Sleater said. She was referring to the fact that while Argentina has participated in several intense negotiations over the last month with lawyers and principals of six of the biggest holdout hedge funds, it has not sat down with other holdout investors. Instead, it has made a blanket offer in a take-it-or-leave-it manner that has some investors angry.

At the 11th hour of what many have called a historic deal involving Argentina and its holdout investors, it seems that those investors who were once united in their dispute against Argentina are turning against one another.

”We haven’t been intransigent, there isn’t an impasse,” said Michael Spencer, a lawyer who represents another group of individual bondholders and small funds contesting Argentina’s offer. Mr. Spencer said most of his clients bought their bonds before Argentina defaulted for full value. ”We’re not greedy,” he added as he sought to separate his clients from the holdouts that have been at times called vultures for their reputation of buying bonds up for pennies on the dollar and then seeking full repayment.

Judge Thomas P. Griesa heard from 15 lawyers representing the holdout investors big and small, Argentina, the banks, and even a group of exchange bondholders investors who agreed to take a so-called haircut during one of Argentina’s two restructurings. The exchange bondholders have not been paid since Judge Griesa ruled that Argentina cannot pay any bondholders without also paying the holdouts.

The hearing on Tuesday became messy as lawyers divided into two groups: one group that wants Argentina to be able to pay those who have settled immediately, and another group that is asking the judge to give everyone 30 more days.

Judge Griesa wants to lift the injunction that has prevented Argentina from making these payments to all bondholders after a settlement offer and the proposal it made on Feb. 5.

”We should no longer be held hostage by other parties who want a better deal,” an animated Christopher J. Clark, a representative of a group of exchange bondholders, said on Tuesday. He said his clients had been denied $3.1 billion in interest payments.

After nearly two hours of arguments and rebuttals, Judge Griesa, who has been presiding over the battle for over a decade, adjourned the hearing, deferring a decision for later.

”This has been a remarkable afternoon,” he said shortly before walking out of the court.

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3. ARGENTINA NEARS $15BN BOND ISSUE IN RETURN TO CAPITAL MARKETS (Financial Times (FT.Com))
By Elaine Moore
2 March 2016

Argentina is on the verge of issuing the largest sum of debt by any developing economy nation since 1996 as the country seeks to end a long-running and rancorous debt dispute using fresh borrowing.

In global financial markets, the question is what rate Buenos Aires will be forced to pay after a 15-year market hiatus and who will want to invest in a country that has been guilty of serial defaults for the past 200 years.

On Monday, Mauricio Macri, Argentine president, agreed to a $4.65bn cash payment for four “holdout” creditors who refused to restructure debt after the country’s 2001 default, including Paul Singer’s Elliott Management.

The deal, which has not yet been finalised, paves the way for resolution of a legal battle that has frozen Argentina out of international markets.

Once the total cost of the accord has been calculated, Argentine finance minister Alfonso Prat-Gay has said it will be funded through $15bn of new bonds. Further debt issuance to fund government spending is expected later in the year.

This would make Argentina the largest issuer of hard currency bonds in emerging markets since Mexico borrowed $16bn 20 years ago, according to data provider Dealogic.

With requirements this substantial, any hope the country has of borrowing money at less than 8 per cent a year may be dashed said Sergio Trigo Paz, head of emerging markets fixed income at BlackRock, the world’s largest fund manager.

“We’re very happy that Argentina has reached an agreement with bondholders,” he said. “But with such a significant amount of debt to issue it will have to look at a higher clearing price.”

One European investment house has said it will only invest if Argentina offers to pay out an expensive, double-digit yield.

Greg Saichin, managing director of emerging markets fixed income at Allianz Global Investors, said the scale of debt required meant Argentina would be wise to stagger its new bond issuance.

“Argentina has a reformist government and it is staffed by ex-Wall Street people who know what they are doing but it still hasn’t fixed up its economy,” he said. “They will expose themselves if they bring too much paper to the market in one go. I’d advise them to start with an $8bn sale.”

Debt issuance by emerging market countries has been notably light so far this year as the strengthening US dollar and dwindling global appetite for risky investment raises the cost of borrowing.

Emerging market sovereigns have issued $19bn in hard-currency bonds in 2016, down from $25bn over the same period last year as large borrowers including Russia and Turkey remain absent from markets.

Since pro-business president Mauricio Macri took office in December markets have rallied and prices for Argentina’s existing bonds have lifted out of crisis territory. Yields, which move inversely to prices, have fallen in the last year and Bonar 2024 bonds, a possible point of comparison to new 10 year debt, now yield 7.9 per cent.

However, potential investors in new Argentine debt are likely to take into account the country’s poor record when it comes to repaying obligations. Since declaring independence from Spain in 1816, the country has defaulted on its external debt eight times.

Argentina argues that the real number is seven and that the last default, which is connected to the deal the country has struck with holdout bondholders, was only technical.

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4. THE END OF THE ARGENTINE DEBT IMPASSE IS IN SIGHT; MACRI HAS SCORED A SUCCESS BUT THE PRESIDENT STILL HAS MUCH TO DO (Financial Times)
2 March 2016

A final deal between Argentina and its holdout creditors has been so long in coming that its arrival is almost hard to believe. Argentina’s government, led by President Mauricio Macri, is on the verge of completing a restructuring a decade and a half after what was then the largest sovereign default in history.

The $4.7bn settlement with holdout investors, led by the New York fund Elliott Management, will allow Argentina to return to international capital markets. Its access had been blocked by a New York judge’s ruling that prevented it paying out on alreadyrestructured bonds while it was still refusing to settle with the holdouts.

The proposed deal is an essential part of Argentina’s encouraging return to economic sanity under Mr Macri after he took over in December. But triumphalism would be misplaced. For one, the eccentric rulings of Thomas Griesa , the judge in the case, leave uncertainty hanging over future restructurings. Second, Mr Macri’s ambitious plans to stabilise Argentina’s economy are subject to serious risks.

That the creditors were persuaded to settle for 75 per cent of the bonds’ accrued value rather than holding out for 100 per cent owes something to a surprise ruling last month by Judge Griesa, who weakened their negotiating hand by signalling he would lift the injunction preventing other creditors being paid. Unusually, the judge explicitly said that Mr Macri’s election, and with it the inception of an Argentine government prepared to negotiate in good faith, was pivotal in his decision.

This only fuels suspicions that the judge’s personal exasperation with past Argentine governments played an unduly large role in his rulings. It leaves the important question of the legal precedent being set by this case in a cloud of confusion. Judge Griesa is 85 and has expressed a desire to retire soon. How much future judges will rely on their own assessment of the perceived attitude of a government in debt negotiations is anyone’s guess. Judge Griesa’s rulings have hardly helped to resolve the complicated issue of sovereign bond restructuring.

By settling with creditors, along with lifting exchange controls and restoring central bank independence, Mr Macri may have cleared the decks. But even assuming the settlement deal passes the Argentine congress, the president must still steer a course through choppy and unpredictable seas.

Mr Macri has inherited an economy in a mess , with a wide fiscal deficit and inflation around 30 per cent. He plans a fiscal tightening while at the same time expecting an economic rebound to more than 4 per cent growth next year. His government also wants to reduce inflation, despite the upwards shock to prices from the recent sharp depreciation in the peso. Expecting to achieve all this at once looks optimistic.

Moreover, both the federal government and the provinces will probably have to resort to fairly substantial debt issuance during the adjustment. Given the precarious nature of emerging market asset markets, attracting buyers at good prices for Argentine sovereign debt is not straightforward. The excellent start to Mr Macri’s presidency suggests investors will give him the benefit of the doubt, but sentiment can turn quickly.

Argentines may feel aggrieved that they have in effect been forced to pay ransom to return to the global capital markets. A combination of inept populist governance from previous administrations and arbitrary court rulings from New York have inflicted lasting damage. Mr Macri has done well to end the impasse, but it is only one stage on the country’s slow journey back to economic normality.

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5. THE ARGENTINA COMEBACK; MACRI LEADS HIS NATION TOWARD A RETURN TO GLOBAL CAPITAL MARKETS (The Wall Street Journal Online)
1 March 2016

U.S. presidential candidates are busy boasting about the wonders to come in their hypothetical first 100 days in office. Perhaps they should look far South and consider the real-world example of new Argentine President Mauricio Macri.

This week he settled a dispute with a number of the country’s creditors that had dragged on for more than a decade as it tarnished Argentina’s reputation. Mr. Macri now has the country poised for a return to international capital markets and perhaps an economic revival that was impossible under his Peronist predecessor Kristina Kirchner.

The Macri administration agreed Sunday night to pay more than $4.6 billion to Elliott Management and other U.S. hedge funds holding Argentine bonds that had been issued prior to the country’s 2001 default. While many of the country’s bondholders had accepted government offers of roughly 30 cents on the dollar after the default, Elliott and the other holdouts maintained that under the law and their bond contracts they were entitled to be paid in full.

Ms. Kirchner’s refusal to negotiate with what she called “vulture” investors punished her own country far more than it did the investors. Mr. Macri understands this and has aimed to resolve the issue.

By agreeing to pay roughly 75% of what Elliott and other funds say they were owed, the new President has resolved the claims on about 85% of the bonds owned by holdout creditors. Assuming his negotiators are able to resolve the remaining claims, Mr. Macri seems well on his way to persuading a U.S. federal judge to lift injunctions that have effectively prevented Argentina from borrowing in U.S. bond markets. Now President Macri must persuade Argentine legislators to approve the deal as well.

In December we noted that Mr. Macri spent his first week in office ending capital controls and moving toward a stable peso. This week’s action suggests that the rule of law is returning to Argentina.

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6. ARGENTINE PRESIDENT: NATION IN BAD SHAPE BUT CHANGE COMING (The New York Times)
March 1, 2016

BUENOS AIRES, Argentina — Argentine President Mauricio Macri painted a grim picture of the nation on Tuesday, telling Congress that the state is broke, drug traffickers are prospering and institutions including the armed forces are so weakened that the borders are barely protected and many military planes cannot fly.

Addressing Congress on the first day of the legislative session, Macri also blasted the previous administration, saying that political patronage had led to a major spike in the number of workers on government payrolls. Several thousand people have been fired since Macri assumed office in December.

“We are a great country with enormous potential,” Macri said, sitting next to Vice President Gabriela Michetti as he addressed Congress. “But the first thing we must do is recognize that we are not in good shape.”

Macri, a conservative and former mayor of Buenos Aires, campaigned on promises to modernize the economy by attracting foreign investment, root out corruption and solve a long-standing spat with creditors in the U.S.

Speaking in a somber tone during the hour-long speech, several times Macri returned to the issue of drugs. He said Argentina was a “prosperous country for drug traffickers,” and added that the South American nation had become the world’s third largest producer of cocaine.

The problem was exacerbated by “borders that are virtually defenseless” and a military so weakened that it possessed “planes that don’t fly.”

Macri addressed the long-standing fight with a group of creditors in the U.S., bluntly framing it as a problem now in the hands of Congress. On Monday, Argentina and the group of creditors led by billionaire investor Paul Singer announced a tentative deal, potentially putting an end to years of legal fights that have kept the South American nation from accessing international credit markets.

The deal, however, must be approved by Congress, where Macri doesn’t have majorities in either chamber and will likely face stiff opposition from some sectors of the Peronist Party, which lost the presidency for the first time in 12 years in last year’s election.

Macri said he trusted legislators would “be responsible” in their rhetoric and “we’ll build the necessary consensus” to pass a deal.

Former President Cristina Fernandez refused to negotiate with the group of creditors she called “vultures,” even after New York federal court Judge Thomas Griesa repeatedly ruled against Argentina.

Macri said the decision not to engage had cost Argentina dearly. He said the total hanging debt went from about $3 billion in the beginning to about $11 billion, and that the inability to access international credit markets had cost Argentina $100 billion and millions of jobs. He did not explain how he came to those numbers, but the implicit message to Congress was clear: don’t mess this up.

Roberto Bacman, director of the Center for Public Opinion Studies, a South American research firm, said Macri will likely get the votes he needs to pass the deal with the holdouts, but that will mean negotiating on other things, like supreme court nominations.

“Votes are never free,” said Bacman, adding that the biggest threat to Macri’s ability to govern was the high inflation. Last year, it was estimated around 30 percent. After a sharp devaluation of the peso in December, prices have continued to soar.

Macri commented on the inflation, and said that the solution was to get the economy growing again after four years of virtual stagnation in its gross domestic product. He said the process would take time, and blamed the previous administration for “700 percent inflation in the last 10 years.”

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7. SINGER TANGO BRAVO ARGY MESS TAMED (New York Post)
By Josh Kosman
1 March 2016

Paul Singer and Argentina on Monday announced a settlement in their epic war.

“It gives me greatest pleasure to announce that the 15-year pitched battle between the Republic of Argentina and Elliott Management, led by Paul Singer, is now well on its way to being resolved,” Daniel Pollack, the New York court-appointed mediator in Argentina’s bondholder litigation, said.

By resolving most of its bondholder suits, Argentina – under newly elected President Mauricio Macri – will be able to again access the global debt markets.

Meanwhile, the deal to pay Singer’s firm roughly 75 cents on the dollar for government bonds Singer acquired in 2001 for 25 cents gives Singer a nice payout, over a much longer time frame.

“They got a very good settlement,” a source said, explaining why Singer changed course.

Based on rough calculations, Singer’s Elliott will make an annual 15 percent return on its $300 million investment over 15 years – clearing almost a $1 billion profit.

Still, it was quite a turn for Singer, who had been demanding to be paid in full and, as recently as 2013, impounded an Argentinian naval training ship in Ghana as a means of demanding repayment.

The dispute was between Argentina and bondholders who never accepted a 25- cents-on-the dollar exchange made in 2001 for $93 billion in defaulted debt.

Macri, who took office in December, reopened negotiations and, with the help of New York Judge Thomas Griesa, pushed talks along.

On Feb. 19, Judge Griesa ruled he would allow Argentina to reenter the capital markets to help its people because it had shown a willingness to make a credible offer.

That left Singer with “a choice about being right or just getting paid,” an Argentina debt holder told The Post.

He is taking the money.

Bondholders had until the end of Monday to join the settlement or risk being left behind. The settlement is contingent on Argentina’s Parliament approval.

Former Argentina President Cristina Fernandez de Kirchner instead took a very tough approach with bondholders, and never offered close to 75 cents on the dollar.

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8. DEBT DEAL BATTLE BEGINS IN ARGENTINA (Financial Times)
By Daniel Politi in Buenos Aires
March 1, 2016

Argentina’s president urged the opposition-led congress to approve a deal to pay holdout creditors that could end the country’s long banishment from international capital markets.

“It is now up to congress to determine whether we finish with this conflict that has been going on 15 years,” Mauricio Macri said at the opening of the new congressional year on Tuesday. “I trust the reality will take priority over the rhetoric.”

The president begins a domestic political battle to implement a $4.653bn preliminary agreement to pay the top holdout creditors, led by Paul Singer’s Elliott Management, that had refused to restructure debt from the country’s 2001 default. The long legal battle with the holdouts pushed Argentina into a technical default in 2014 after New York judge Thomas Griesa said the country was forbidden from servicing its restructured debt abroad. Preliminary agreements have been reached with holdouts who have 85 per cent of the total monetary claims against Argentina in US courts. Discussions are to continue with the remaining holdouts.

In order for Mr Griesa to lift the financial blockade against Argentina, the congress must first approve the agreements with the holdouts and lift two laws — the Lock Law and Sovereign Payment Law — that effectively block the country from paying creditors who had refused the 2005 and 2010 restructurings.

“Failing to resolve this conflict was expensive for Argentina and benefited the bondholders,” Mr Macri said. “The lack of access to credit cost Argentina $100bn and more than 2m jobs that were never created.”

Mr Macri’s electoral alliance, known as Let’s Change, has only around 35 per cent of seats in the lower house of congress, although allies and a recent split in the bloc aligned with the former administration make approval of the deal likely.

Support, however, will not come without opposition. The staunchest allies of former president Cristina Fernández de Kirchner have already made clear they will not greenlight the deal.
Former economy minister Axel Kicillof, now an opposition lawmaker, described the deal as an “unacceptable extortion”. Andres Larroque, a lawmaker who leads the Kirchnerite youth group La Campora, called Mr Macri “the hero of the vulture funds”.

The president faces a bigger challenge in the senate, where his alliance only has 15 of 72 seats and allies of the previous administration hold a clear advantage.

The government and its allies do not have a lot of time to convince the opposition. Cash payments must be finalised by April 14, although the parties could agree to extend the deadline.

The government will present a bill to congress this week with discussions expected to begin in committee on Thursday.

“For the first time in 15 years we can say that Argentina is starting to definitively leave the default,” finance minister Alfonso Prat-Gay said at a news conference on Monday night.

To secure support, the government will have to rely on any pressure that can be exerted by governors, many of whom are also eager to see the conflict with holdouts end to clear the path to issue debt.

Vice-president Gabriela Michetti suggested the provinces will play a key role in obtaining the necessary votes to seal the deal with holdouts.

“We will have the necessary numbers because otherwise the provinces will face an enormous difficulty to finance their own deficits,” Ms Michetti said after the speech.

Argentina hopes to issue two or three new sovereign bonds in international markets for up to $15bn to finance the agreements with bondholders, which must be paid in cash. That is expected to be the first in a string of issuances.

The national governments, provincial governments and local companies are expected to issue debt worth $25bn-$30bn this year, according to estimates by Alejo Costa, chief of research at Puente, a local brokerage. Out of that total, the national government is expected to issue around $20bn and provincial governments an additional $3bn.

“At a corporate level, things are unlikely to start picking up until 2017,” Mr Costa said.

The US Treasury Department celebrated the imminent return of Argentina to the global markets.

“Resolution of this longstanding dispute is a positive development for the entire global financial system,” a Treasury spokesperson said late Monday. “We look forward to full implementation of the agreement, which should help Argentina return to the international capital markets and promote strong and sustainable growth.”

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9. CLOCK TICKS AS ARGENTINA’S MACRI ASKS CONGRESS TO OK CREDITORS DEAL (Reuters.com)
By Hugh Bronstein and Maximilian Heath
March 1, 2016

Argentine President Mauricio Macri on Tuesday urged Congress to approve a landmark deal reached with creditors over defaulted debt, in order to comply with a U.S. court deadline and permit access to the financing needed to jumpstart Latin America’s third largest economy.

Macri, less than three months in office, is likely to cobble together the votes needed to implement the deal announced on Monday to pay $4.65 billion “holdout” hedge funds that rejected steep cuts in repayment terms offered in the country’s 2005 and 2010 bond restructurings.

The question is whether Congress will pass the deal before an April 14 deadline set by the U.S. court hearing the case.

Adding to the urgency, the local peso is plumbing record lows, 30-percent inflation is squeezing consumers, and Macri’s approval ratings have taken a hit as he cuts the public payroll.

“We have been in default since 2002,” Macri said. “I am counting on this Congress to end this conflict, which has lasted 15 years. I am sure you will meet this responsibility.”

As he spoke, the local currency hit an all-time low of 16 to the U.S. dollar. Macri’s address to both houses of Congress was interrupted by applause from allies and heckling from foes.

Some held up signs saying “Destruction of the State”, in reference to recent public sector job cuts, and “Don’t Mortgage the Future”. The opposition is against Argentina’s return to the global bond market, fearing a steep increase in indebtedness.

The country must settle the court case in order to launch Macri’s economic recovery program. Elected in November on a free markets platform, he has lifted many of the controls that previous President Cristina Fernandez had put on the economy.

Miguel Angel Pichetto, a leader of moderate Peronists in the Senate, said earlier that the proposed deal with holdouts will not go to an immediate vote.

“The bill has to be studied carefully,” he said, adding that he is likely to vote in favor.

Provincial governors, desperate for money needed to restore crumbling roads, are lobbying the Senate in favor of the deal.

But Senator Maria de los Angeles Sacnun, a staunch Fernandez ally, called the deal “an intrusion of our sovereignty.”

The U.S. judge hearing the creditors’ case said last month that he wants Congress to repeal the law banning the government from offering better terms than those included in Argentina’s 2005 and 2010 debt restructurings. The holdouts rejected those restructurings and sued for full repayment in the U.S. courts.

The government wants to issue two or three new sovereign bonds on international markets for a total of up to $15 billion in April if lawmakers are swift in backing the accord.

Analysts and administration officials say he can get the support he needs in the lower house of Congress, where his coalition has the biggest minority and no party has a majority. Fernandez’s allies will nonetheless put up a fight.

“Now the extortion has been put before Congress,” house member Axel Kicillof, who served as Fernandez’s economy minister, wrote in an editorial.

(Reporting by Hugh Bronstein Editing by W Simon and Clive McKeef)

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10. SOVEREIGN DEBT: ARGENTINA REACHES A DEAL WITH ITS CREDITORS (The Economist)
Mar 1st 2016
The agreement is a victory for the country’s new president

FOR more than 14 years Elliott Management, the hedge fund led by Paul Singer, was the pantomime villain in Argentina’s dispute with its bondholders. Rather than accepting a big write-down, as other creditors did during restructurings in 2005 and 2010, Elliott, along with several other “holdout” creditors, pursued full payment through the New York courts. That led to a default by Argentina in 2014.

Now the drama is entering its final act. On February 29th Daniel Pollack, the court-appointed mediator, announced that Argentina had reached an agreement in principle with four of the largest creditors, led by Elliott. Argentina’s payment of $4.65 billion will be 25% less than they were claiming. With this agreement, Argentina has settled with creditors who hold 85% of the disputed debt.

It is a coup for Mauricio Macri, Argentina’s recently elected president, and will end the country’s long isolation from the international credit markets. Together with other steps Mr Macri has taken since assuming office in December, including ending exchange controls and removing taxes on exports, the credit deal helps restore normality to an economy that had been distorted by populist controls during 12 years of rule by his two Peronist predecessors, Cristina Fernández de Kirchner and her late husband, Néstor Kirchner.

Argentina’s negotiators paved the way by reaching deals with smaller groups of holdouts. On February 2nd Argentina agreed to pay a group of Italian bondholders $1.35 billion; on February 5th it settled for $1.1 billion with two of the six largest holdouts, Montreux Partners and EM Ltd. But Mr Singer’s Elliott Management led the most intransigent group; an agreement with them is the real prize.

Thomas Griesa, the judge overseeing the case, had contributed greatly to Argentina’s predicament in 2012 when he ruled that the country could not pay bondholders who had agreed to a restructuring, or issue new debt, unless it settled with the holdouts. That precipitated Argentina’s default. On February 19th this year the judge in effect switched sides, saying that Mr Macri’s election had “changed everything”. He said he would lift the injunction barring Argentina from paying other creditors from March 1st under certain conditions. That was a severe blow to the holdouts, who had used the injunction as leverage to press Argentina for full payment. “The message to non-settling plaintiffs, many of whom have had no opportunity to negotiate with anyone, is unmistakable: settle by February 29th, or else,” wrote their lawyers.

The deal is not quite sealed. Before the injunction is lifted Argentina must repeal two laws that block agreements with the holdouts. The “Ley Cerrojo” (Lock Law), enacted in 2005 during the first round of debt restructuring, was intended to prevent Argentina from offering holdouts a better deal than that accepted by holders of restructured bonds. The “Ley de Pago Soberano” (Sovereign Payment Law) of 2014 was a failed attempt to circumvent Mr Griesa’s injunction by re-routing payments to exchange bondholders through Argentina or France.

The government is confident that it can secure the votes it needs to repeal the laws when Congress resumes on March 1st. In early February, 18 deputies from the Front for Victory (FPV), Ms Fernández’s party, broke away to form their own, more moderate, “Justicialist Bloc”. The move deprived the FPV of its position as the largest party in the lower house. The defectors have said they are willing to work with the new government to repeal the laws. In the upper house the government plans to enlist the support of Peronist governors, who are also keen to tap international credit markets. They are likely to persuade the senators over whom they have influence to support the repeal of the legislation.

Once the laws have been scrapped, the government hopes to raise up to $15 billion through a bond issue which it will use to pay the creditors. Some analysts doubt that the market can absorb such a large bond issue in one go. But Argentina’s finance ministry is bullish. “All the banks we’ve spoken with are confident that we can raise the money we need in the market,” said Luis Caputo, the finance secretary. “We’re optimistic.”

The government then plans to return to the market in an effort to finance its budget deficit, which was a massive 5.8% of GDP last year. Under Ms Fernández’s administration the central bank financed the budget deficit by printing money, pushing up inflation. The bond issue will help the central bank to end that harmful practice, but the relief from high inflation will not come immediately. Propelled by the devaluation of the peso, the annual inflation rate has risen to around 30%; the government had hoped inflation this year would be 20-25%. It is trying to persuade trade unions not to demand excessive wage rises, which would drive inflation even higher. The unions are taking a hard line, however. On February 26th teachers extracted an agreement from the government for a 32% salary increase; other unions will demand a pay rise at least as big.

Mr Macri has so far taken a cautious approach to bringing down the budget deficit. Energy subsidies have been cut, but the president is reluctant to slash other spending, which would further antagonise Argentines already angry about inflation and, he fears, weaken growth and employment. But until the government brings the deficit substantially down, the central bank will struggle to regain credibility. A return to the bond markets is not enough.
Nevertheless, the debt deal should boost the government’s confidence. Argentina has until April 14th to repeal the legislation and pay Elliott and its fellow litigators in full. It must also settle with the holders of the remaining 15% of the debt. But for now the exhausted negotiators are allowing themselves a moment of congratulation. “It seemed like a thousand years to me”, Mr Pollack said of the seemingly interminable negotiations. Mr Macri hopes not to take up much more of his time.

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11. HEDGE FUND CREDITORS’ DEAL WITH ARGENTINA SETS ALARMING PRECEDENT (The American Prospect)
By David Dayen
March 1, 2016

Argentina’s long march back to international debt markets may finally have reached its end. Late Sunday night, the government and “vulture” hedge fund creditors struck a deal that would allow the South American nation to borrow once again for the first time in nearly 15 years. The longest debt holdout in recent memory reinforces the ethos of the vulture fund: Use maximum leverage for maximum return on a cheap investment in a troubled country. Paul Singer and his hedge fund pals have played this so well that they’re even making their enormous payday look like a loss.

The home of tango and 32-ounce grass-fed steaks decided to default on $132 billion in debt after an economic crisis in 2001, closing off access to credit markets. Unexpectedly to purveyors of the neoliberal consensus, growth followed under President Nestor Kirchner amid a commodity price boom. Cleaning up the aftermath, Argentina engaged in two debt restructurings in 2005 and 2010. Roughly 93 percent of all bondholders participated in these exchanges, which entitled them to 30 percent of face value of the debt.

But holdouts saw an opportunity. NML Capital’s Singer, his former protégé Mark Brodsky of Aurelius Capital, and a handful of other hedge funds scooped up Argentine debt at fire-sale prices and refused to settle. Years of hardball wrangling, which included Singer trying to commandeer an Argentine naval ship in Ghana as partial repayment, culminated with the vulture funds using U.S. courts to force Argentina’s hand.

The Argentine bonds, which were governed by New York law, had to be repaid pari passu, or with equal treatment. Judge Thomas Griesa ruled that Argentina could not repay the 93 percent of exchange bondholders who took the deal unless they also paid out the 7 percent who did not. But paying the holdouts in full would trigger a “Rights Upon Future Offers” (RUFO) clause, and compel full reimbursement to every bondholder, nullifying the debt restructuring and putting Argentina back in the hole by $100 billion.

So Argentine leaders played their only card: They refused to follow the U.S. court order, instead not paying anyone after August 2014, their second default in 13 years. This immiserated the Argentine economy, harmed the exchange bondholders who accepted the reduced terms, and exposed the inability of U.S. courts to sanction sovereign nations.

The only relief for this standoff was an election. Mauricio Macri, the right-leaning mayor of Buenos Aires running against the Kirchner-dominated movement that ruled Argentina for a decade, won the presidency last December, on a vow to impose business-friendly policies and end the creditor standoff. Because the RUFO clause expired in 2015, Macri could negotiate with the holdouts without having to apply their deal to other bondholders. Judge Griesa helped negotiations along by dropping the injunction on paying all creditors who accepted the earlier deals.

Without further leverage, Singer and company settled. But the deal is quite lucrative: $4.65 billion for four hedge funds (NML, Aurelius, Davidson Kempner, and Bracebridge Capital), including about 75 percent of the $5.9 billion in principal and interest owed, plus legal fees and a special payment for claims outside the New York-law jurisdiction.

Singer, who personally participated in the negotiations for weeks, tried to downplay the deal, calling Argentina’s negotiator “tough but fair” and that “a settlement is, by definition, a compromise.” But weep not for the vultures. First of all, a 25 percent haircut is far better than the 70 percent haircut accepted by bondholders in the 2005 and 2010 debt exchanges. Second, Singer paid $48.7 million for his bonds, which had an $832 million face value, according to Forbes. A 25 percent haircut leaves him with $624 million, or a 1281 percent return on investment.

But it could be far more than that, as the interest on some of the bonds accrued at the level during the Argentine default, which was 101 percent per year. This arguably explains why Singer held out for a decade; 101 percent interest can add up quickly. When you add in all the interest, the final judgments that Singer owns reportedly total $1.7 billion. Even a 75 percent haircut on that would be an astronomical payday.

It’s hard to get exact figures on just how much Singer and company paid for the bonds, and how much they will extract from Argentina; hedge fund exemptions from disclosure requirements inhibits a full accounting. And some of these bonds were purchased as far back as 2002, so the long wait should be factored into calculations of annualized returns. Still, whatever the precise math, the fact is that, while Singer goes around moaning about a compromise, he is being rewarded handsomely merely for having the insight to buy up the bonds of a country in trouble and the determination to remain as stone-faced as possible while waiting for a big return.

The Argentine government is certainly happy to crawl out from under the rock of default, and to unlock international credit markets to refresh depleted foreign reserves. A fresh infusion of capital will help with a treacherous inflation situation, and stabilize the country’s economy.

Of course, the first set of borrowing will go directly to paying off the holdouts, not Argentine public services or investment. That the holdouts succeeded this much, with the help of the U.S. judiciary no less, always represented to me a kind of punishment for Argentina rejecting the IMF-led consensus. They defied the world and lived to tell about it. The holdouts gave the international community a chance to punish the country for its intransigence, and only let them out of the vice grip when they elected a pro-business president.

Meanwhile, the precedent for this working out so well for the vulture funds is terrifying. A principle has been firmly established, that you can go around looking for sick countries and corporations and use all necessary means to use their pain for profit. It can be applied to Puerto Rico, where another similar tragedy is playing out. The ability to renegotiate debt, a standard tool in practically all borrowing relationships, will be hurt by the example of stubbornness winning out.

In a deal struck Sunday, hedge funds led by billionaire investor Paul Singer have managed to squeeze billions out of a struggling economy.

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12. ARGENTINA AFTER KIRCHNER: MACRI REFORMS, CONGRESS RETURNS (The National Interest)
By Shannon K. O’Neil
March 1, 2016

During his first two months in office Argentine President Macri pushed through reforms to eliminate currency controls, cut export taxes and remove energy subsidies. He also appointed two new judges to the Supreme Court and enhanced the court’s oversight of security surveillance, postponed promised changes to the legal system, shuffled responsibilities within the cabinet, modified a contentious media law and annulled a Kirchner decree transferring federal funds to the provinces. All was done without Congress, which entered its three-month summer recess on November 30 (before Macri’s inauguration). This will change March 1, as the legislature comes back into session.

The most immediate executive-legislative negotiation will involve the Cerrojo and Pago Soberano laws, both of which prevent Argentina from settling with holdout creditors. Last week U.S. District Court Judge Griesa agreed to lift the injunction preventing Argentina from making bond payments so long as these laws are repealed and those who settle by February 29 are paid.

Another big issue will be coparticipaciones, or federal transfers to the provinces. Before stepping down Cristina Kirchner changed the rules, ordering the transfer of a previously withheld 15 percent of tax intakes back to the provinces (which Macri quickly cancelled). The administration is now negotiating a permanent end to these transfers by 2021 in return for forgiving provincial debt.

Other issues include confirming the two Supreme Court justices he installed on the bench, creating a new media regulator, Enacom, and liberalizing the broadcasting industry.

Though Macri’s own party holds only 42 of the 257 seats in the Chamber of Deputies, with his electoral coalition partners UCR and CC and the support of Sergio Massa’s UNA (a dissident Peronist and the second runner up in October’s presidential election), he holds the largest plurality and a near majority. Splintering within the former Kirchner FPV coalition bring another dozen congressional votes into play. His administration will benefit too from the difficult financial situation of so many provinces. Governors, and by extension many senators and representatives, are likely to support the administration in its legislative agenda as they look for federal funds and permission to emit debt to cover mounting current obligations.

More worrisome for Macri’s reform agenda are the just begun annual labor negotiations. The unions are demanding 40 percent wage hikes; the government hopes to keep increases below 25 percent. Private consultants and local Buenos Aires measures suggest inflation is at 30 percent—outstripping the government’s announced expectations of 20-25 percent (the INDEC statistic agency is being revamped to meet international technical standards, so no official national numbers exist). Macri’s team already lost a first round to the teachers union, granting them a 40 percent raise. Many governors are now refusing to recognize the agreement and up teacher pay given their financial straits. Labor unrest, particularly if it leads to violence, could dent the president’s popularity, down 10 percent since his start in December. Yet granting bigger wage hikes threatens to spur inflation, increase fiscal deficits (already at 7 percent of GDP in 2015), and derail Macri’s broader economic reform agenda.

Shannon K. O’Neil is the Nelson and David Rockefeller Senior Fellow and Director, Civil Society, Markets, and Democracy Program at the Council on Foreign Relations.

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13. ARGENTINE JUDGE DECLARES HERSELF ‘UNFIT’ TO TRY NISMAN CASE (Associated Press)
March 1, 2016

BUENOS AIRES, Argentina (AP) — An Argentine judge overseeing the investigation into the mysterious death of prosecutor Alberto Nisman on Tuesday declared herself “unfit” to try the case, the state news agency Telam reported.

The move by lower court Judge Fabiana Palmaghini effectively pushes the case to federal court. Her decision comes a day after she heard testimony by the South American nation’s most famous spymaster, Antonio Stiuso, about his relationship with Nisman who died while investigating Argentina’s worst terrorist attack.

Stiuso had assisted Nisman’s investigation of the unsolved 1994 bombing of a Buenos Aires Jewish center before he was found shot dead in his apartment on Jan. 18, 2015. Days before his death, Nisman accused then-President Cristina Fernandez of helping Iranian officials cover up Iran’s alleged role in the bombing that killed 85 people. The case against Fernandez was later thrown out.

At the time, Fernandez suggested Nisman was killed by rogue intelligence agents, though she gave no evidence. She also said that Stiuso fed false information to Nisman and even had a hand in writing the late prosecutor’s report detailing the accusations against her.

Palmaghini had previously said that there was not enough evidence to determine that the prosecutor was slain. She also had rejected a request to move the case to a federal court, prompting Nisman’s family to appeal.

The details that caused her to change her mind have not been released. Telam only said on Tuesday that Palmaghini will send Nisman’s file to federal courts in Buenos Aires where a new judge will be picked to handle the unsolved case that has rocked Argentina.

Stiuso oversaw a widespread wire-tapping operation before he was removed as head of Argentina’s spy agency in December 2014.

The evidence shows that Nisman tried to contact Stiuso four times by telephone the day before he was found shot dead. But Stiuso said in a statement to a prosecutor last year that he never heard the calls and he fled Argentina complaining of threats on his life. He had failed to comply with a summons ordering him to testify until this week.

His closed-door testimony came just days after a top Argentine prosecutor told the country’s criminal court of appeals that the case should be handled by a federal court and that he believes Nisman was killed and didn’t take his own life, marking the first time that a judicial official has called Nisman’s death a homicide.

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14. ARGENTINE CREDITORS ASK U.S. JUDGE TO WAIT ON LIFTING INJUNCTIONS (Reuters News)
1 March 2016

NEW YORK, March 1 (Reuters) – A group of Argentine bondholders who reached a $4.65 billion settlement resolving litigation over defaulted bonds urged a U.S. judge on Tuesday to wait longer before lifting injunctions that restrict the country from paying off some debts.

Hedge funds including Elliott Management’s NML Capital asked U.S. District Judge Thomas Griesa in Manhattan to wait 30 days to formally order the injunctions vacated, to allow the remaining plaintiffs to reach settlements.

Theodore Olson, NML’s lawyer, said that firm and three other hedge funds that agreed to Monday’s settlement considered it a “monumental achievement” that would resolve the bulk of the decade-plus litigation.

He said the deal could fall apart if the remaining plaintiffs, holding 15 percent of the claims in the litigation, are not given a chance to also settle, as they likely would appeal a decision lifting the injunctions.

“The agreement is just on the edge of being successful,” Olson said.

Michael Paskin, Argentina’s lawyer, countered that no delay was needed, and Argentina deserved certainty so that it could raise money in capital markets to fund the settlements.

“It is fully invested in the opportunity your honor has presented to resolve this litigation once and for all,” Paskin said.

The arguments stemmed from an order by Griesa on Feb. 19 indicating that, at Argentina’s request, he planned to order the injunctions vacated, provided the country repeals two laws concerning its debts and pays creditors who by Monday had reached settlements.

That order came after Argentina offered on Feb. 5 to pay $6.5 billion to settle lawsuits by various bondholders stemming from its record $100 billion default in 2002.

Argentina says $6.2 billion in deals have been reached with creditors who spurned its 2005 and 2010 debt restructurings, which resulted in 92 percent of its defaulted debt being swapped and investors being paid less than 30 cents on the dollar.

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Tuesday, March 2nd

1. ARGENTINA’S 15-YEAR DEBT BLOCKADE SET TO END AFTER DEAL WITH CREDITORS; • $4.7BN ACCORD WITH ‘HOLDOUTS’ IS WIN FOR MACRI • MOVE LIKELY TO END CAPITAL MARKETS BAN (Financial Times)

2. ARGENTINA CUTS DEAL WITH DEBT HOLDOUTS (The Wall Street Journal)

3. ARGENTINA REACHES DEAL WITH 4 HEDGE FUNDS OVER OLD DEBT (The New York Times)

4. ARGENTINA’S DEBT SETTLEMENT ENDS 15-YEAR BATTLE (The New York Times)

5. ARGENTINA AND US CREDITORS REACH DEAL IN LONGSTANDING SPAT (Boston Globe)

6. ARGENTINA, LEAD CREDITORS SETTLE 14-YEAR DEBT BATTLE FOR $4.65 BILLION (Reuters News)

7. ARGENTINA’S DEBT DRAMA: HOW WE GOT HERE: A GUIDE TO INVESTORS’ 15-YEAR BATTLE OVER DEFAULTED BONDS (The Wall Street Journal)

8. ARGENTINA ENDS 15-YEAR DEBT SAGA IN DEAL WITH ‘VULTURES’ (CNNMoney)

9. PAUL SINGER CUTS DEAL WITH ARGENTINA AFTER UGLY, 15-YEAR DISPUTE (Bloomberg Business)

10. ARGENTINA AND US CREDITORS REACH DEAL IN LONGSTANDING SPAT (Associated Press)

11. ARGENTINA REACHES SETTLEMENT WITH HEDGE FUNDS, ENDING 15-YEAR DISPUTE (NPR.com)

12. ARGENTINA SAYS TO RESUME PUBLISHING INFLATION DATA IN JUNE (Reuters News)

13. PAUL SINGER WINS LONG BATTLE WITH ARGENTINA; HAVE EMERGING MARKET BONDS HIT BOTTOM? (Forbes.com)

14. IT’S BEEN EMOTIONAL (Financial Times (FT.Com))

15. ARGENTINA REACHES $4.65BN DEAL WITH HOLDOUTS (Financial Times (FT.Com))

1. ARGENTINA’S 15-YEAR DEBT BLOCKADE SET TO END AFTER DEAL WITH CREDITORS; • $4.7BN ACCORD WITH ‘HOLDOUTS’ IS WIN FOR MACRI • MOVE LIKELY TO END CAPITAL MARKETS BAN (Financial Times)
By Daniel Politi in Buenos Aires and Pan Kwan Yuk in New York
1 March 2016

Argentina is poised to return to international capital markets after a 15-year ban as it finally reached agreement with a group of creditors led by Paul Singer’s Elliott Management .

The deal, which needs approval by Argentine lawmakers, is to pay $4.653bn to settle all claims with four “holdouts” that refused to restructure debt after the country’s 2001 default.

During the 15-year legal battle creditors have attempted to embargo everything from navy frigates to satellite launches to claw back the money a New York court said they were owed from defaulted bonds.

Argentina suffered a second technical default in 2014 after New York judge Thomas Griesa said it was forbidden from servicing its restructured debt abroad without paying the holdout creditors first.

The agreement is a victory for Mauricio Macri , the Argentine president, who took office on December 10, after he made ending the legal battle against holdout funds one of his campaign promises.

Elliott welcomed the agreement. “We are hopeful the completed negotiations . . . have cleared the way for other plaintiffs to reach satisfactory resolutions as well,” it said.

To lift the financial blockade on Argentina, the country’s congress must approve the deal and lift two laws that prevent the country from paying creditors who had rejected the 2005 and 2010 restructurings. Analysts and allies of Mr Macri are optimistic that they have the necessary votes to pass the measures once Congress resumes today.

Decision after decision had gone against Argentina but the judicial tables began to turn in favour of the country last month when the new government offered to pay about $6.5bn in cash to the holdouts for claims of $9bn.

“Put simply, President Macri’s election changed everything,” wrote Judge Griesa on February 19 after he agreed in principle to lift the injunction.

Cristina Fernández de Kirchner, Mr Macri’s predecessor, had refused to negotiate with the holdouts, frequently referring to them as “vultures”.

The deal with the four biggest creditors means that agreements in principle have been reached with bondholders who hold more than 85 per cent of the claims against Argentina that have favourable rulings in US courts, according to mediator Daniel Pollack.

Alfonso Prat-Gay, the Argentine finance minister, has said the country plans to issue $15bn in debt to fund the payments without dipping into reserves. As part of the agreement, the holdouts agree not to try to interfere with that issuance, Mr Pollack said. That is expected to be the first of several issuances by Argentina, provinces and private companies.

“This is the equivalent of a giant albatross being lifted from Argentina’s neck and comes just in the nick of time,” said Brett Diment, head of emerging market debt at Aberdeen Asset Management.

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2. ARGENTINA CUTS DEAL WITH DEBT HOLDOUTS (The Wall Street Journal)
By Julie Wernau and Taos Turner
1 March 2016

Argentina has reached a preliminary agreement to end one of the longest and most contentious battles over government debt in history, potentially handing a big payday to hedge funds that held out for a decade and a half.

The government agreed in principle on Sunday to pay $4.65 billion to Paul Singer’s Elliott Management Corp. and three other hedge funds to settle their claims on the country’s defaulted sovereign bonds, according to Daniel Pollack, a mediator charged by a U.S. judge with overseeing settlement of the dispute.

The agreement still has to clear a number of hurdles, including winning approval of the Argentine congress and heading off legal challenges from any creditors who don’t cut a deal. But if completed as envisioned, it would pay about 75% of what the hedge funds have said Argentina is obliged to pay, several times more than they actually invested in the debt.

Torino Capital, a New York-based investment bank, said the hedge funds will likely reap between 10 to 15 times what they initially paid for the bonds. That figure, which is based on the assumption that they bought the debt at about 20 cents on the dollar, is in line with other analysts’ estimates. The settlement includes accrued interest and lawyers fees.

A deal also would be a victory for Argentina’s new president, Mauricio Macri, who made settling the dispute among his priorities during the campaign. He wants a deal so Argentina can raise new capital from foreign bond offerings to help stimulate its depressed economy.

The ruling party has only a small number of legislators, and Mr. Macri will have to reach across party lines to get the votes he needs, analysts said. Still, pollsters said that after 15 years of stalemate, public opinion is coalescing around a deal.

“More than 60% of the Argentine people think a settlement will be very beneficial to the Argentine economy,” Alejandro Catterberg, director of polling firm Poliarquia Consultores, said on Monday.

Karina Sapini, a 24-year-old hairdresser, said Argentina needs to pay its debts and backed a deal with bondholders. “It’s like at my business,” she said. “If I don’t pay for my shampoo and conditioning products, my providers will stop selling them to me.”

Argentina stopped payment on more than $80 billion of debt in 2001, the largest government default at the time. An overwhelming majority of bondholders, 93% in all, settled for 30 cents on the dollar, leaving the remainder of holdouts to battle for more.

The new willingness to settle represents a sea change for the government and for Argentine citizens battered by years of economic weakness. Argentina’s previous administration had taken a hard-line stance with the hedge funds, calling them “financial terrorists” and vowing not to give in to their payment demands.

“We are pleased to have reached an agreement with Argentina,” a spokesman for Elliott Management said. Elliott and other bondholders have declined to comment on their profits or when they acquired the defaulted debt.

On Monday, some legislators already were criticizing the deal. “This is a barbarity,” said Congressman Claudio Lozano, calling on the government’s auditing agency to study the agreement. “We want all the information about this before voting on it.”

The dispute was dubbed the “trial of the century” by analysts, who said a successful settlement will set important precedents. The outcome upends the conventional wisdom that bondholders have little recourse if a government defaults on its debt. The pact raises the likelihood that a minority of bondholders could be successful in the future in isolating a government from broader credit markets to force payment.

The lengthy battle was possible, because the bonds were sold to investors without collective action clauses, which would have forced minority holders to go along with a settlement if the bulk of the creditors agreed.

Argentina isn’t an isolated case in that regard. Countries have issued about $900 billion in bonds in foreign currencies and governed by a foreign country’s laws. About 20% of those bonds don’t include collective-action clauses, according to the International Monetary Fund.

Hedge funds and legal specialists are now watching Venezuela,where President Nicolas Maduro’s administration coulddefault on bonds sold by the government or state-owned oil company Petroleos de Venezuela SA, or PdVSA. Some of Venezuela’s bonds allow a minority of bondholders to hold out against a large majority.

Argentina’s ability to hold off payment ran out, as years of isolation from capital markets drained its reserves and left its economy in shambles. Amid 30% inflation, a large fiscal deficit, stagnant economic growth and declining reserves, Argentines ousted the country’s long-ruling populist government in December and installed Mr. Macri.

The new government’s policies have made the country’s markets one of the most popular bets among investors. Argentina’s Merval index has gained 12% this year at a time when most of the world’s stocks are falling.

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3. ARGENTINA REACHES DEAL WITH 4 HEDGE FUNDS OVER OLD DEBT (The New York Times)
By Alexandra Stevenson and Jonathan Gilbert
1 March 2016

Argentina has agreed to pay $4.65 billion to four hedge funds in a deal that could put an end to more than a decade of mudslinging and legal attacks that had cut the country off from global financial markets.

The agreement, announced on Monday, opens the door for Argentina to attract foreign investment needed to revive its stalling economy.

”This is the equivalent of a giant albatross being lifted from Argentina’s neck,” said Brett Diment, the head of emerging market debt at Aberdeen Asset Management. ”The litigation and lack of access to international capital has had a sclerotic effect on the country for years but it was facing a real financial squeeze this year,” he said.

The four hedge funds, which include the billionaire Paul E. Singer’s NML Capital, were the last major hedge fund investors among a group that declared legal war on Argentina in the United States courts 12 years ago.

These holdouts, so named for their refusal to participate in Argentina’s two restructurings after the country defaulted on $100 billion of debt in 2001, sought billions in bond repayments and eventually succeeded in preventing Argentina from paying any of its creditors.

And they went to great lengths to compel Argentina to pay — at one point persuading authorities in Ghana to seize an Argentine navy ship as collateral, with a crew of about 300 on board. They also moved to impound other government assets, including a satellite.

Their ultimate victory illustrates the outsize influence hedge funds can have in the countries where they bet their money. And their legal tactics are likely to be used again by other investors contesting the debt obligations of sovereign powers.

The four holdout firms, including Aurelius, a hedge fund run by Mark Brodsky, a former trader at Mr. Singer’s Elliott Management; Davidson Kempner; and Bracebridge Capital, have agreed not to try to prevent Argentina from raising new money, which it will need to do in order to pay the settlements it has made.

The deal will also depend on whether Argentina’s legislature will repeal domestic laws that prevent the government from paying holdouts. The parties agreed on a deadline of April 14 to pay the settlement.

The settlement will be extremely profitable for the hedge funds. Martin M. Guzman, a postdoctoral research scholar at Columbia Business School, has estimated that NML paid $48 million for some bonds it bought in 2008 and with the deal it will receive approximately $620 million for those bonds — an annual return of about 38 percent over eight years.

For Mr. Singer, who has supported Republican candidates and gay marriage, principle was as important, if not more, than profit, in pursuing a nearly 15-year fight.

”By being a country that scoffs at the rule of law, they sacrifice so much,” Mr. Singer said in a recent interview. NML’s investments in Argentine debt and other sovereign debt represented less than 2 percent of the $26 billion in assets that his hedge fund company, Elliott Management, manages over all, he noted.

A spokesman for Elliott said on Monday that the firm was ”pleased to have reached an agreement.”

Pressure had been growing on the holdouts to settle with Argentina after its newly elected president, Mauricio Macri, moved quickly to settle with other bondholders. His government struck a $1.35 billion settlement with a group of Italian investors and offered to pay $6.5 billion to the group of six hedge fund holdouts in February. Two of those firms, Montreux Partners and Dart Management, accepted the proposal.

On Feb. 19, Judge Thomas P. Griesa of the Federal District Court in Manhattan, who has presided over the lengthy legal battle, dealt the holdouts a setback by agreeing to lift an injunction that has prevented Argentina from raising new money in bond markets or paying its creditors.

”This is a giant step forward in this long-running litigation,” Daniel A. Pollack, the court-appointed mediator, said on Monday, adding that Argentina’s decision to settle was ”nothing short of heroic”

The $4.65 billion represents 75 percent of the full judgments for the four hedge funds and includes principal, interest and a payment to settle the claims outside of the court, as well as ”certain legal fees and expenses incurred.”

The battle between the holdouts and Argentina reached a nadir under the previous president, Cristina Fernández de Kirchner, who called the holdouts ”vultures” and ”financial terrorists.”

Axel Kicillof, the former economy minister, even sought to question the impartiality of the mediator, Mr. Pollack, saying a year ago: ”If he takes off his jacket you can see his feathers,” referring to the vultures.

”For the first time in 15 years, we can say that Argentina has really started to exit default,” Alfonso Prat-Gay, Argentina’s new economy minister, told reporters in Buenos Aires on Monday, adding that the situation had ”drowned” the economy.

He attacked the Kirchner administration for refusing to settle the issue, adding that by letting the dispute fester, interest had accumulated and investors had lost confidence.

These lost investments and central bank reserves used to service tens of billion of dollars of debt in recent years could have been poured into the economy, creating up to two million jobs, Mr. Prat-Gay said.

Argentina would sell up to $15 billion in bonds from April to finance the payment, he added.

”Argentina is joining the world in an intelligent way,” Mr. Prat-Gay said.

That nation’s legislature could take most of March to debate whether to revoke the law, and a decision should be expected by the end of the month, according to Sergio Berensztein, an Argentine political analyst.

Despite the accord, Argentina’s bonds were little changed on Monday, showing that investors had already priced in a deal.

The reverberations from the legal battle with Argentina may be felt for years to come.

In 2012, the holdout hedge funds achieved a stunning breakthrough when Judge Griesa ruled that whenever Argentina wanted to pay any of its creditors, it would have to also pay the holdouts. The move and its fallout led Argentina to default on its debt again in 2014.

That move will have far-reaching implications, many analysts say. With his ruling, the judge has laid the foundations for future investors to contest the debt obligations of other countries.

Anna Gelpern, a law professor at Georgetown University, said that the ruling created a new tool for investors.

”The tool is a kind of financial boycott” that would allow creditors to enforce equal payment in other instances, she added.

Mr. Guzman went further, saying that the settlement created ”a problem of moral hazard in which this settlement incentivizes this type of behavior because it is profitable.”

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4. ARGENTINA’S DEBT SETTLEMENT ENDS 15-YEAR BATTLE (The New York Times)
By Liz Moyer
1 March 2016

The announcement of a $4.65 billion agreement between the Argentine government and four ”holdout” hedge funds promises to end a 15-year battle that started when the government defaulted on $100 billion in debt in 2001.

The hedge funds refused to accept a steep discount in two restructurings over the years, while others took 30 cents on the dollar. The agreement announced on Monday gives the four holdouts — Paul Singer’s NML Capital, Mark Brodsky’s Aurelius Capital Management, Davidson Kempner Capital Management and Bracebridge Capital — 75 percent of their claims. Two other hedge funds struck an earlier agreement for 75 percent of their claims. The deal is subject to approval by Argentina’s Congress.

Here’s a look at some crucial moments of the fight over the years.

Oct. 11, 2012 Mr. Singer’s NML Capital persuaded the government of Ghana to freeze the Argentine Navy’s training ship, the Libertad, in port until Argentina put up millions of dollars. Months later, a United Nations tribunal ordered Ghana to release the ship, and it was allowed to sail home.

June 15, 2014 The United States Supreme Court refused to hear the Argentine government’s appeal on court orders to pay back the debt to the American hedge funds. It also voted 7-1 that bondholders could force Argentina to reveal where it owned property around the world.

June 15, 2014 Argentina’s president, Cristina Fernández de Kirchner, said she would refuse to pay back $1.5 billion to the ”vulture” hedge funds despite a court order. She called it extortion and said paying it could set off $15 billion in cash payments to other bondholders, which would be half Argentina’s central bank’s foreign reserves.

Sept. 29, 2014 Judge Thomas P. Griesa of the Federal District Court in Manhattan ruled that Argentina was in contempt of court, saying it would face repercussions for going against his orders on payments to bondholders.

2014 Graffiti around Argentina’s capital, Buenos Aires, called the hedge funds ”vultures” and popularized slogans such as ”Homeland or vultures” and ”Sovereignty or vulture swindle.” Judge Griesa’s caricature appeared in graffiti depicting vultures behind prison bars.

Nov. 22, 2015 Argentina elected Mauricio Macri as its new president, promising free-market policies in contrast to President Fernandez’s refusal to negotiate with the hedge funds. He has moved quickly to settle with bondholders, including a $1.3 billion deal with Italian investors.

Feb. 19, 2016 Judge Griesa lifted an injunction that barred Argentina from raising new money in bond markets or paying its creditors. The ruling depends on two things: Argentina has to repeal a law that prevents it from paying the holdout hedge funds, and it has to make full payments to bondholders who settle by Monday.

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5. ARGENTINA AND US CREDITORS REACH DEAL IN LONGSTANDING SPAT (Boston Globe)
By Peter Prengaman
March 01, 2016

BUENOS AIRES — Argentina and a group of US holdout creditors unveiled a deal on Monday in a longstanding debt standoff, potentially breaking an impasse that has kept the South American country on the margins of international credit markets and has led to a rewriting of the terms of debt issuance and negotiations worldwide.

The deal is a boost for President Mauricio Macri, who assumed power in December after campaigning on promises to modernize South America’s second-largest economy by solving the dispute and attracting foreign investment.

‘‘It gives me greatest pleasure to announce that the 15-year pitched battle between the Republic of Argentina and Elliott Management, led by Paul E. Singer, is now well on its way to being resolved,’’ arbiter Daniel A. Pollack said in a statement.

The agreement still must be approved by Argentina’s Congress, which would also need to revoke two laws that effectively ban such settlements. The ‘‘Lock Law’’ prevents Argentina from offering one group of creditors a better deal than others and the ‘‘Sovereign Payment Law,’’ passed in 2014, allowed Argentina to pay creditors with renegotiated debt in the face of a New York court order not to do so.

The 2014 law was passed at the behest of then-President Cristina Fernandez, who refused to negotiate with groups she called ‘‘vultures,’’ casting the fight as an American court trying to bully a sovereign nation.

Under the deal, Argentina would pay $4.653 billion to resolve all related claims, including those from Singer’s group in New York and other creditors around the world. The agreement would pay the funds managed by Elliot, Aurelius Capital, Davidson Kempner, and Bracebridge Capital about 75 percent of their judgments, the statement said.

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6. ARGENTINA, LEAD CREDITORS SETTLE 14-YEAR DEBT BATTLE FOR $4.65 BILLION (Reuters News)
1 March 2016

NEW YORK/BUENOS AIRES (Reuters) – Argentina has agreed to a $4.65 billion cash payment to its main holdout creditors and will present the deal to Congress this week for a vote which would end 14 years of bitter legal battles and pave the way for its return to global credit markets.

Finance Minister Alfonso Prat-Gay said he hoped to issue two or three new sovereign bonds on international markets for a total of up to $15 billion in April if lawmakers were swift in backing the accord. The bonds would finance the payout to all holdout creditors who had reached an agreement, he said.

The vote will be a test of center-right President Mauricio Macri’s ability to garner cross-party support for his reform package to revive the struggling economy.

“This is a giant step forward in this long-running litigation, but not the final step,” mediator Daniel Pollack said.

The deal, agreed in principle late on Sunday, will see the four largest remaining holdout creditors get paid 75 percent of the amount outstanding on their judgments, including principal and interest, Pollack said.

Hedge fund Elliott Management, run by billionaire Paul Singer, brought numerous lawsuits against Argentina.

The legal saga involved years of court battles, street protests in Buenos Aires, the seizure of an Argentine naval vessel, and increasingly distorted economic policies as the government tried to avoid settling with the holdout creditors who blocked them raising capital on the international markets.

“He was a tough but fair negotiator,” Pollack said of Singer.

In a statement, Elliott said it was “pleased” to have reached an agreement that awarded it slightly better terms than the 72.5 percent accepted by some other investors earlier this month. Pollack said negotiations with remaining holdouts would be based upon the original offer Argentina made on Feb. 5 rather than using the agreement reached on Monday as a new baseline.

The other main holdout investors also included in the deal are Aurelius Capital Management, run by former Elliott alumni Mark Brodsky, as well as Davidson Kempner and Bracebridge Capital.

A spokesman for Aurelius declined to comment.

Argentina fell back into default in July 2014 after former leftist leader, Cristina Fernandez refused to negotiate better terms than those offered in bond swaps that followed Argentina’s then-record 2002 default on $100 billion.

Underlining the bitterness of the dispute, Fernandez blasted U.S. District Judge Thomas Griesa who oversees the cases as “senile” and branded the hedge funds “vultures.” Macri, a pro-markets advocate, made resolving the battle a priority after taking office in December.

January saw the beginning of weeks of marathon negotiations between creditors, Finance Secretary Luis Caputo and Pollack.

Prat-Gay said Argentina was taking the key step to curing its default and that Argentina was already in talks with banks over a new debt sale on global markets.

“We hope that if Congress reaches a decision quickly … we will probably be able to go to the market in April,” Prat-Gay told a news conference.

If the payment is not made by noon eastern standard time on April 14, 2016, then the agreement could become null and void if the two sides do not agree an extension.

The holdouts rejected two prior debt restructurings in 2005 and 2010 that paid out roughly 30 cents on the dollar. The investors who accepted those deals have not been paid interest since July 2014 after Griesa barred further debt payments until a deal was reached with the holdouts.

On Feb. 5, Argentina put forward a plan, saying it had a $6.5 billion pot of money with which to settle roughly $9 billion worth of claims filed before Judge Griesa.

Despite the deal, the main holdouts filed a motion in court on Monday urging Griesa not to lift the injunctions because there are many other plaintiffs who have not yet settled the dispute.

NEW BEGINNING FOR ARGENTINA

A final settlement would open financing options to Argentina’s new president as he tries to improve the country’s fiscal problems without imposing the kind of sharp spending cuts that have gotten previous Argentine leaders removed from office.

Under the terms of the agreement the holdout investors said they would not interfere with capital-raising.

Macri was elected in November promising free-market policies following eight years of protectionism under Fernandez.

“This is the equivalent of a giant albatross being lifted from Argentina’s neck,” said Aberdeen Asset Management’s head of emerging market debt, Brett Diment. “Argentina was facing a real financial squeeze this year. Now the litigation is resolved, the country should be able to access markets once again.”

Macri is expected to stress the need for Congress to approve a set of bills clearing the way for the deal with the holdout creditors when he presides over the opening of the 2016 Congressional session on Tuesday.

The government is confident it can muster the votes in both chambers, a task made easier after the main Peronist opposition party fractured earlier this month.

If the deal with Elliott and the other main holdouts is closed, it would leave more than 85 percent of the “pari passu” and “me-too” court injunctions resolved.

Prat-Gay said negotiations would continue with remaining holdout investors, including bondholders in Germany and Japan.

“We look forward to full implementation of the agreement, which should help Argentina return to the international capital markets and promote strong and sustainable growth,” a U.S. Treasury spokesperson said in a statement emailed to Reuters.

Argentine bonds were little moved by the accord.

“The implied yield at the moment would be about 8.25 pct on the restructured bonds so you could see that coming in to 7 – 7.5 percent,” said Stuart Culverhouse, head of research at emerging markets brokerage Exotix in London. “At that level it would be more than fair value so the scope for a big rally from here is probably limited.”

The 2033 U.S. dollar-denominated Discount bond was up marginally in price to bid 117.550, yielding 6.36 percent, according to Thomson Reuters data.

The 2038 Par bond closed up 0.5 percent at 65.69, yielding 7.06 percent .

(Reporting By Daniel Bases in New York, Hugh Bronstein and Richard Lough in Buenos Aires; Additional reporting by Nate Raymond and Tariro Mzezewa in New York; Editing by Clive McKeef, Andrew Hay and Bernard Orr)

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7. ARGENTINA’S DEBT DRAMA: HOW WE GOT HERE: A GUIDE TO INVESTORS’ 15-YEAR BATTLE OVER DEFAULTED BONDS (The Wall Street Journal)
By Julie Wernau
Feb 29, 2016

Argentina’s $4.65 billion agreement in principle to pay holders of its defaulted debt promises to end a 15-year standoff that has been one of the longest and most contentious debt battles in history. Here’s a guide to the saga.

Q: How did Argentina get in this debt mess?

A: In 2001, embroiled in the worst economic crisis in the country’s history, Argentina defaulted on more than $80 billion in debt. That is to say, it stopped paying.

Q. Who owned those bonds?

A. Hundreds, possibly thousands of people. Among them: Argentine families, hedge funds and institutional investors.

Q. Did Argentina ever pay its creditors back?

A. Argentina agreed to replace the defaulted bonds with new bonds that were worth about 30 cents on the dollar. In two such deals in 2005 and 2010, 93% of creditors accepted the discounted bonds.

Q. What about the other 7%?

A. The other 7%, or the so-called holdout creditors, refused to take the offers. They’ve been battling with Argentina to get paid ever since.

Q. With so many creditors on board, why couldn’t Argentina force the remaining holdouts to take a deal?

A. Argentina had burned investors in the past; so, when it sold its bonds, to garner interest, it sweetened the deal by offering bonds that were designed to give bondholders confidence that they would get paid what they were promised. While other bonds come with clauses that would have forced holdouts to go along if most other bondholders accepted a deal, these bonds did not. The bonds were also proffered under U.S. law and bondholders were given the right to be treated equally to other
bondholders, but we’ll get to that later.

Q. How about you explain that equal-treatment thing now?

A. Under this equal treatment provision (something called “pari passu”), a court determined that Argentina couldn’t continue to pay some bondholders and not others. In 2014, a ruling on pari passu led the country to also default on $29 billion in debt held by bondholders who had accepted the debt exchange. The court said that if Argentina paid those bondholders, it would also have to pay its “vulture” hedge-fund creditors.

Q. Who called the hedge funds “vulture” funds?

A. Argentina’s former president Cristina Kirchner publicly denounced the country’s holdout creditors, calling them “vultures” who had bought the country’s defaulted bonds on the secondary market (after the default) with the intention to sue for massive profits.

Q. Did a court ever determine that Argentina should pay?

A. Yes. Repeatedly in some cases. Beyond the case involving the hedge funds, Argentina has been dealing with dozens of lawsuits in several jurisdictions involving more than 60 different kinds of bonds. Some of those bonds have the right to equal treatment, some do not.

Q. Did Buenos Aires pay?

A. No. But that didn’t stop Argentina’s largest creditors – a group of hedge funds owed billions led by Aurelius Capital Management and billionaire Paul Singer’s Elliott Capital Management – from doing everything they could to get paid. They sued in an attempt to seize the assets of Argentina’s central bank. They also attempted to seize
an Argentine vessel and prevent a satellite from launching.

Q. So what has changed recently?

A. In December 2015, Argentina elected a new president, Mauricio Macri, who made settling the country’s debts and re-entering the capital markets a top priority. Mr. Macri sat down with creditors for the first time in February. He then made a unilateral offer to all holdouts that was met with mixed reviews. Some bondholders immediately accepted the deal. The vast majority did not. Finally, on Monday the negotiator in the case announced a $4.65 billion agreement between Argentina and the
major holdout hedge funds.

Q. What are the obstacles?

A. Several. First, Argentina’s Congress has passed something called a “lock law,” which forbids Argentina from paying any holdout bondholders any more than it offered in the 2005 and 2010 restructurings. Mr. Macri doesn’t hold a majority in Congress and in order to have that law lifted, he will need to convince lawmakers that he isn’t rolling over for hedge funds that even the local press call “vultures.” Second, even if creditors accept the deal, a U.S. federal judge would have to agree to lift the pari passu injunction before anyone would get paid. Third, none of this bars the possibility of “holdout holdouts”– smaller bondholders who feel they were treated unfairly and appeal to a higher court in order to block anyone from getting paid.

Q. What happens next?

A. U.S. District Court Judge Thomas Griesa has agreed to hear from both sides on Tuesday about whether an injunction should be lifted.

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8. ARGENTINA ENDS 15-YEAR DEBT SAGA IN DEAL WITH ‘VULTURES’ (CNNMoney)
By Patrick Gillespie
February 29, 2016

Argentina’s 15-year debt battle is finally coming to an end.

Its government reached an agreement with major American hedge funds that it had battled with since the country broke the record books and defaulted on $95 billion of debt in 2001.

Argentina agreed to pay a group of hedge funds led by NML Capital and its owner, billionaire Paul Singer, $4.6 billion. That represents 75% of the claims that the hedge funds had sued Argentina for, according to a statement issued Monday by the mediator in the case, Daniel Pollack.

The agreement would open the doors to allow foreign investment into Argentina again. It had been shut out of foreign capital markets since 2001. The hedge funds — known as “vultures” in Latin America — sued Argentina shortly after buying its defaulted debt and a battle ensued for 15 years.

“It’s a very important step,” said Mauro Roca, senior economist at Goldman Sachs. “The country needs foreign investment to finance growth and development.”

Without foreign investment, Argentina’s economy has stagnated and suffered mightily from inflation, which has risen over 25% annually in recent years.

Argentina’s Congress still needs to approve the deal. It first needs to repeal two laws created under the former president, Cristina Fernandez de Kirchner, that forbade paying these hedge funds. It’s expected that Congress will repeal the laws and approve the deal.

A New York judge overseeing the case, Thomas Griesa, is also expected to lift an injunction that prevented Argentina from paying other bondholders until it reached an agreement with these holdout firms. Griesa signaled last week in a statement that he was heavily leaning towards lifting the injunction at a hearing on Tuesday.

The country’s new president, Mauricio Macri, came into office in December determined to end the 15-year battle. His cabinet had been negotiating with the hedge funds since December.

After Argentina battled the hedge funds for 15 years, Macri’s team closed in a deal in under three months.

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9. PAUL SINGER CUTS DEAL WITH ARGENTINA AFTER UGLY, 15-YEAR DISPUTE (Bloomberg Business)
By Katia Porzecanski, Charlie Devereux and Bob Van Voris
February 29, 2016

Ø Argentina agrees to pay holdouts $4.65 billion, 75% of claim

Ø Accord will help bring end of isolation from bond market

Paul Singer versus the republic of Argentina is over.

Some 15 years after the country carried out the biggest sovereign default ever, and 13 years after the hedge-fund billionaire first sued for repayment, the two sides reached a settlement late Sunday. The deal marks a major milestone for Argentina and its new president, Mauricio Macri, restructuring the lion’s share of the debt remaining from the default and freeing up the nation to tap international markets for much-needed financing as its commodities-rich economy falters.

It also brings a close to a bruising, at times ugly, conflict that cost both sides dearly over the years — in legal fees, lost investment opportunities and countless headaches. Argentina had even become something of a pariah state, unable to fly its presidential plane or dock its naval ships in some cities abroad out of fear they’d be seized by Singer’s lawyers. In financial circles, the two names will be forever linked, like George Soros and the Bank of England or Jim Chanos and Enron. And their drawn-out feud serves as a cautionary tale for both cash-strapped governments flirting with default and the combative speculators looking to fight them in court.

“It’s definitely the longest, high profile holdout case I’ve ever seen,” said Edwin Gutierrez, a money manager at Aberdeen Asset Management. “There are some, but none have been this high profile and of this magnitude.”

The accord, which triggered gains today in Argentine bonds, calls for the country to pay $4.65 billion in cash to Singer’s Elliott Management and fellow hedge funds Aurelius Capital Management, Davidson Kempner and Bracebridge Capital, according to a court-appointed mediator. The amount includes $4.4 billion for 75 percent of almost $5.9 billion in principal and interest of claims in New York, as well as $235 million for claims outside that jurisdiction and some of the holdouts’ legal fees, the mediator, Daniel Pollack, told reporters Monday in New York. The nation will raise the funds it needs in overseas bond markets and the agreement will expire April 14, he said.

After years of dealing with former President Cristina Fernandez de Kirchner’s intransigence on the issue and her seeming disinterest in adhering to U.S. law, New York courts have lauded Macri’s efforts to make good on his campaign pledge to put an end to the litigation shortly after beginning his term in December. Officials began traveling to New York to meet with creditors in January and published their first proposal to creditors Feb. 5.

Deal Terms

Terms of the agreement are better than the previous offer of 72.5 percent of creditors’ claims and mark a significant improvement from earlier restructurings that imposed losses of about 70 percent on debtholders. About 7 percent of creditors, including Elliott, rejected those initial terms — which were offered in 2005 and then again in 2010 — and pursued repayment in court.

“We are pleased to have reached an agreement,” Elliott said in a statement.

The dispute had deteriorated over the years into a contentious affair that bordered on the uncivilized on many occasions, like when Fernandez called the 85-year old judge who presided over the case “senile” or referred to Singer as a “Vulture Lord” and “bloodsucker.” As Singer ramped up his efforts for repayment — at one point he briefly seized a naval vessel — the feud evolved beyond an issue of paying one’s debts into one of defending national pride and sovereignty that Fernandez tried to pass along onto the next generation.

Video games, board games and cartoons were created to teach children about the dangers of vulture investors, and the business school at the University of Buenos Aires boasts a debt museum devoted to the saga. After Argentina won the World Cup semifinals in 2014, the crowd’s patriotic victory chants devolved into a profanity-laced taunt of the hedge funds. Even toward the end, as Macri’s team took over the talks, the two sides were still sniping at each other: The hedge funds described Argentina’s recent legal tactics as manipulative and abusive, while Finance Minister Alfonso Prat-Gay had said that if talks stalled, it wouldn’t be Argentina’s fault.

Singer’s Role

Ultimately, Pollack said of the Argentine officials involved in the talks that “their course-correction for Argentina was nothing short of heroic” while Singer “was the central figure who involved himself intensely with me over the past several weeks on behalf of the ‘holdout’ bondholders. He was a tough but fair negotiator.”

While the announcement was widely expected, markets posted small gains today. Prices on the government’s benchmark bonds due 2033 climbed to 117.8 cents on the dollar while yields on local-law bonds due 2017 declined to 6.41 percent.

The agreement comes weeks after Argentina agreed to pay almost $2 billion to other holdouts, as well as another $1.34 billion to 50,000 Italian bondholders.

The accord with Elliott still requires approval from Argentina’s Congress, which also needs to repeal a law that currently prevents the country from proposing terms to the holdouts that are better than those the nation offered creditors in restructurings. Congress reconvenes in March.

“I don’t think the terms of this agreement would be the reason why they don’t get this approved,” said Diego Ferro, co-chief investment officer of Greylock Capital Management. “There’s nothing outrageous or surprising about this deal for the opposition to use it as an excuse.”

Only a small group of holdout creditors now remain. Pollack said he will continue to broker negotiations between them and the government, working off of the framework laid out in the Feb. 5 proposal. Michael Spencer, an attorney for a group of smaller investors with more than $832 million of claims on defaulted bonds, said his clients haven’t been able to negotiate directly with Argentina yet. “I hope they are motivated to offer my clients an even better deal,” he said by phone.

Bond Sales

With approval from U.S. District Judge Thomas Griesa, the settlement will probably allow for the release of about $3 billion of interest payments that he’s blocked since mid-2014 and the reversal of his orders prohibiting Argentina from paying restructured bonds unless the holdouts were also paid. Fernandez had refused to comply with the ruling, pushing the nation into a second default.

After eight years of Fernandez policies that drove away investors, Macri needs to lure foreign money to revive a faltering economy and replenish foreign reserves that hit a nine-year low in December. Within his first week in office, he lifted capital controls that had prevented companies from repatriating dividends and devalued the peso, ending years of a gradual-decline policy that kept the currency overvalued as inflation soared.

The accord with the holdouts is the final step to allow Argentina to return to international credit markets. The country, which hasn’t sold bonds abroad since the default, has settled arbitration cases at the World Bank, paid Spanish oil company Repsol SA for the expropriation of YPF SA and negotiated with the Paris Club of creditor nations.

The holdouts, who have tried to thwart Argentina’s past attempts to raise funds internationally, won’t interfere in the nation’s attempts to raise capital for the settlement, Pollack said.

Alejo Costa, the head of strategy at Buenos Aires-based brokerage Puente, estimates Argentina will need to issue about $11 billion dollars to pay the holdouts and an additional $8 billion dollars to fund its fiscal needs. Selling that much debt, especially at a time when emerging markets are suddenly out of favor, “will require the government to do a good job communicating its strategy on the fiscal and monetary side.”

Prat-Gay and Finance Secretary Luis Caputo are wasting little time in delivering that message. They’re scheduled to hold a press conference at 6 p.m. today in Buenos Aires.

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10. ARGENTINA AND US CREDITORS REACH DEAL IN LONGSTANDING SPAT (Associated Press)
By Peter Prengaman
Feb. 29, 2016

Argentina and a group of U.S. holdout creditors announced a deal on Monday in a longstanding debt standoff, potentially breaking an impasse that has kept the South American country on the margins of international credit markets

BUENOS AIRES, Argentina (AP) — Argentina and a group of U.S. holdout creditors announced a deal on Monday in a longstanding debt standoff, potentially breaking an impasse that has kept the South American country on the margins of international credit markets and led to a rewriting of the terms of debt issuance and negotiations worldwide.

The deal is a boost for President Mauricio Macri, who assumed power in December after campaigning on promises to modernize South America’s second-largest economy by solving the dispute and attracting foreign investment.

“It gives me greatest pleasure to announce that the 15-year pitched battle between the Republic of Argentina and Elliott Management, led by Paul E. Singer, is now well on its way to being resolved,” arbiter Daniel A. Pollack said in a statement.

The agreement still must be approved by Argentina’s Congress, which would also need to revoke two laws that effectively ban such settlements. The “Lock Law” prevents Argentina from offering one group of creditors a better deal than others and the “Sovereign Payment Law,” passed in 2014, allowed Argentina to pay creditors with renegotiated debt in the face of a New York court order not to do so.

The 2014 law was passed at the behest of former President Cristina Fernandez, who refused to negotiate with groups she called “vultures,” casting the fight as an American court trying to bully a sovereign nation.

Under the deal, Argentina would pay $4.653 billion to resolve all related claims, including those from Singer’s group in New York and other creditors around the world. The agreement would pay the funds managed by Elliot, Aurelius Capital, Davidson Kempner and Bracebridge Capital about 75 percent of their full judgments, according to the statement.

Speaking to reporters in New York, Pollack declined to provide more specifics agreement. He said April 14 is the deadline to finish the deal, but added that it could be extended if both sides agree. He described grueling negotiations in recent months, joking that it “felt like a thousand years to me.”

The deal “closes a chapter by putting an end to the debt default saga which limited Argentina’s access to international capital markets,” said Alberto Ramos, chief Latin America economist for Goldman Sachs, predicting that it would also lead to an influx of investment in Argentina.

The debt conflict goes back to Argentina’s 2001-2002 financial collapse, when it defaulted on $100 billion in debt. Most creditors renegotiated in 2005 and 2010 bond swaps. But a group of creditors led by billionaire hedge fund manager Singer refused and took Argentina to court in New York, under whose laws the debt was issued, and won.

New York federal court Judge Thomas Griesa has repeatedly ruled against Argentina, saying the country had to pay the holdouts before it could pay other creditors with renegotiated debt. Those rulings have kept Argentina from accessing international credit markets, forcing it to issue domestic bonds to raise funds and search for backdoor financing from countries like China.

The long, costly fight led to changes in how debt is issued worldwide. Many countries have restructured contracts in attempts to avoid getting into similar situation.

While Macri has good relations with many members of Congress, passage of the deal is not a given. Fernandez’s Peronist Party maintains a majority in the Senate and the largest bloc in the lower house.

However, the Peronists have been fractured since Fernandez’s chosen candidate, Daniel Scioli, lost the election to Macri in November. And business leaders across sectors along with governors in the provinces have joined the federal government in arguing that the country desperately needs foreign investment.

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11. ARGENTINA REACHES SETTLEMENT WITH HEDGE FUNDS, ENDING 15-YEAR DISPUTE (NPR.com)
By Jim Zarroli
February 29, 2016

Argentina has reached an agreement with some of its creditors that should help end a long and acrimonious dispute that has blocked the country from the international bond markets.

The deal, which must be approved by Argentina’s Congress, calls for the government to pay $4.653 billion to four of the so-called holdout U.S. hedge funds. That equals about 75 percent of what they claimed they were owed.

Argentina defaulted in 2001 and has been trying to restructure billions of dollars in debt, but a group of hedge funds, led by Paul Singer’s Elliott Management, refused to go along and sued that country’s government in U.S. federal court.

U.S. District Judge Thomas Griesa subsequently issued an injunction barring Argentina from paying some of its creditors without also paying the holdouts, and the government went into default again in 2014.

The legal fight wound up before the U.S. Supreme Court, which in 2014 upheld lower court rulings and essentially required Argentina to pay the holdouts.

The court battle had lapsed into a bitter political fight, with former Argentine President Cristina Fernández de Kirchner labeling the holdouts “vulture funds.” Meanwhile, Argentina was essentially blocked from borrowing any more money in the bond market.

But everything changed after the November election of President Mauricio Macri, who vowed to end the dispute during his campaign.

“The current administration realized that Argentina cannot be shut down from the international markets, so from the beginning they said, ‘We’re going to fix this problem,’ and that’s what they’re doing,” said Diego Ferro, co-chief investment officer at Greylock Capital Management, in an interview with NPR.

Earlier this month, Judge Griesa agreed to lift the injunction that blocked Argentina from paying its creditors.

The settlement between Elliott Management and Argentina was announced this morning by Daniel A. Pollack, the special master appointed by the court to oversee settlement talks.

The deal does not completely settle Argentina’s debt woes, since some smaller bondholders continue to resist restructuring, Ferro says. But they lack Elliott’s resources and constitute a smaller threat to the government.

“With the biggest, most sophisticated holdouts settled and dropping their claims, I think that Argentina should feel a lot more comfortable going into the markets,” said Anna Gelpern, a professor at Georgetown Law School and a nonresident senior fellow at the Peter G. Peterson Institute for International Economics.

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12. ARGENTINA SAYS TO RESUME PUBLISHING INFLATION DATA IN JUNE (Reuters News)
29 February 2016

BUENOS AIRES, Feb 29 (Reuters) – Argentina’s national statistics agency said on Monday it would resume publishing inflation data in June after a half-year hiatus in order to revamp and restore credibility in the way it calculates consumer price increases.

Under former President Cristina Fernandez, data produced by Argentina’s INDEC statistics office was broadly seen as inaccurate and politically motivated. In particular, it routinely estimated inflation at about half the rate of private forecasts.

Critics said Fernandez’s populist government massaged the data to reduce payments on its inflation-indexed debt load and rein in inflation expectations.

But when new, business-friendly President Mauricio Macri took office last December, he installed a new INDEC director who announced a total overhaul of the agency in a bid to restore the credibility of its data. The publication of new statistics was suspended until the revamp was completed.

“In June, we will return to publishing the Index of Consumer Prices,” said INDEC chief Jorge Todesca, adding that it would be based on data from Buenos Aires city and suburbs showing the evolution of prices between April and May.

Private economists estimate consumer prices are rising around 30 percent on the year. Finance Minister Alfonso Prat-Gay has said he aims to bring it down to around 5.0 percent by the end of the government’s term in 2019.

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13. PAUL SINGER WINS LONG BATTLE WITH ARGENTINA; HAVE EMERGING MARKET BONDS HIT BOTTOM? (Forbes.com)
By Daniel Fisher
29 February 2016

Paul Singer‘s Elliott Associates and a handful of other holdouts scored a near-total victory over the Republic of Argentina as that country agreed to pay $4.75 billion — three-quarters of what they were owed — to settle claims over defaulted government bonds.

The settlement represents the price Argentina had to pay to re-enter world credit markets after losing a pivotal appeal to the U.S. Supreme Court in 2014. And it could increase confidence in other emerging-market debt as investors begin to reassess the ability and willingness of countries to pay interest on their beaten-down bonds.

“Argentina has gone from 12 years of policy deterioration to exceptional government policy” under President Mauricio Macri, said Colm McDonagh, head of emerging-market debt at BNY Mellon’s Insight Investment unit. “They can go and borrow now, and people will start bringing money back onshore.”

Argentina’s capitulation comes just a few weeks after “the peak of bearishness” in emerging-market debt, said McDonagh.With yields on dollar-denominated bonds ranging from 7-15% for sovereign debt in countries like Argentina and Ivory Coast and real yields on local currency bonds running from 3.5% for Mexico to 5% for Romania, he said, emerging-market debt finally offers enough return to reward taking a risk.

“We’re going to clients now and saying you’ve got to look at EM,” said McDonagh, whose group oversees $3 billion in assets. “You’re starting to see policy action from some of these countries.”

Singer’s NML Capital, managed by Elliott Associates, was among a small group of holdouts that resisted Argentina’s attempt to restructure some $24 billion in debt the country defaulted upon in 2001 by issuing new bonds of lesser value. The holdouts brought 11 lawsuits in federal courts in New York and won all of them, including a Second Circuit Court of Appeals decision prohibiting Argentina from paying on the new bonds unless it also paid the hedge funds their pro rata share of what is owed.

Other funds joining in the final settlement negotiated Sunday evening were Aurelius Capital Management, Davidson Kempner, and Bracebridge Capital, according to the special master in the case, Daniel A. Pollack. The settlement represents 75% of the principal and interest owed, and Argentina also will pay some of their legal fees.

Argentina fought hard under former President Cristina Kirchner to avoid paying the hedge funds full value for bonds they mostly bought at deep discounts after the default. Incoming President Macri took a different tack after winning election in November, immediately launching round-the-clock negotiations to resolve the bond dispute.

“Their course-correction for Argentina was nothing short of heroic,” said Pollack in a statement, and Singer “involved himself intensely with me over the past several weeks on behalf of `holdout’ bondholders. He was a tough but fair negotiator.”

The settlement may mark a low-water mark for emerging market bonds, which fell out of favor after climbing on euphoric predictions of rapid economic growth and the idea they offered diversification from the industrialized economies.

“People just went on a hunt for yield and didn’t distinguish the type of risk they were taking,” McDonagh told me. “The peak of that was in 2011.”

Plunging commodity prices crimped the finances of many of those countries and now they are forced to make tough policy choices, such as cutting spending and popular subsidies, to keep paying their debts. Copper-dependent Zambia was able to sell its 5 3/8% bonds at par during the boom and now, with copper prices down, its debt is trading at a 12% yield.

“We’d actually imagine the true risk premium is somewhere in between,” he said.

Eastern European countries are “almost looking like bastions of security, he said. And across Latin America countries like Argentina are starting to restructure their fiscal policies to deal with slow or negative economic growth.

“We think now, even though they’re in a difficult place, you’re being paid to take risk,” he said.

One exception: Venezuela, where inflation is raging amid shortages of all manner of consumer goods.

“The economy there is deteriorating so badly we’re not sure what changes can be made by the current government to make it better,” he said.

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14. IT’S BEEN EMOTIONAL (Financial Times (FT.Com))
By Joseph Cotterill
29 February 2016

It gives me greatest pleasure to announce that the 15-year pitched battle between the Republic of Argentina and Elliott Management, led by Paul E. Singer, is now well on its way to being resolved…

– Daniel Pollack, Special Master in the pari passu deal negotiations

Could it be? Is it over?

The $4.6bn deal (in principle) announced on Monday involves four big pari passu holdouts, including Elliott’s NML.

They have reached agreement days after Judge Thomas Griesa said he would lift his injunction on Argentina to pay holdouts alongside restructured bondholders, which had set off this saga and (along the way) an Argentine sovereign default.

The holdouts would get 75 per cent of their claims on Argentina. Its offer this month, made both to holdouts with judgments on defautled bonds and those building up hefty post-dated interest on pre-judgment debts, had been 70 per cent. (It also paid another holdout 100 per cent of his claim to settle, of course.)

The difference is likely to be more than 5 per cent as Argentina’s specific treatment of that post-dated interest had been a big issue. Argentina will also be paying the holdouts back certain legal fees which, in a litigation which has taken the best part of a quarter of a century, may not be minuscule. Under a deal, Argentina would have to repeal a law against paying holdouts, and issue bonds to raise cash for payment.

According to Mr Pollack (who gets quite emotional in his statement about “nothing short of heroic” President Macri of Argentina and Elliott’s Paul Singer, “a tough but fair negotiator”):

No party to a settlement gets everything it seeks. A settlement is, by definition, a compromise and, fortunately, both sides to this epic dispute finally saw the need to compromise, and have done so.

We’ll be analysing the deal, where we go from here, and whether this saga will bloody end at last later this week.

But for now — some questions to consider:

* Is it actually a deal that has delivered equal treatment to anyone, like you might perhaps have expected from a 15-year pitched battle over the meaning of an 80-word equal-treatment clause?

* Will the creditors holding the remaining 15 per cent of Argentina’s defaulted debt follow Elliott’s lead?

* Did Judge Griesa’s injunction change Argentina’s behaviour at all, or was it all just Mauricio Macri’s election? (Alternatively, did Griesa help Macri win?)

* Does the way Griesa lifted the injunction mean pari passu won’t be so powerful against other sovereign debtors in future?

* Because no sovereign would ever leave itself this vulnerable to a pari passu lawsuit again, right?

Judge Griesa is supposed to have a hearing about lifting the injunction on Tuesday. If you’re in Manhattan and have a good supply of popcorn, it may be your last chance.

Then again, knowing this saga, it may well not.

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15. ARGENTINA REACHES $4.65BN DEAL WITH HOLDOUTS (Financial Times (FT.Com))
By Pan Kwan Yuk
29 February 2016

Break out the bubbly. Argentina on Monday reached an agreement in principle to end its decade-long legal dispute with its remaining holdout creditors in a move that should clear the way for the ailing South American country to return to the international capital markets and allow it to raise much needed cash to stimulate the economy.

The court-appointed, so-called “special master” Daniel Pollack said in a statement that Argentina has agreed to pay a group of holdouts, led by US billionaire Paul Singer’s Elliott Management, $4.65bn, to settle the dispute.

The agreement – which will see the holdout funds take a haircut of around 25 per cent on their claims – still needs to be approved by the Argentine congress and will require the country to repeal several laws put in place by the previous administration that barred it from making such settlements.

An agreement would represent a huge political victory for Mauricio Macri, Argentina’s newly elected market-friendly president, who made putting an end to the dispute a key campaign promise in elections last year.

A deal would also put an end to Argentina’s second default this century in 2014, after the holdouts’ 2012 legal victory in the New York prevented the country from continuing to service debt to holders of restructured debt. It could also lead to upgrades by credit rating agencies, Argentina’s inclusion in emerging market bond indices, and open the door to a return of foreign investment.

As Moody’s, which has a Caa1 deep junk rating on Argentina, said in a note last week:

In the short term, Argentina’s main credit challenge is the definite resolution of the legal issues with holdout creditors which led to the 2014 default.

An agreement with litigating holdouts is a necessary precondition for the country to restore access to international capital markets, providing much needed funding options for fiscal deficit that may end close to 5% of GDP in 2016.

Resolution of the legal problems does not require that all litigating bondholders reach an agreement but it does require a decision by US courts lifting the payment injunctions which led to the 2014 default and currently block international borrowing.

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MONDAY, March 1st

1. ARGENTINE PM CONFIDENT DEBT DISPUTE CAN END WITHIN WEEKS -PAPER (Reuters News)

2. JUDGE CALLS ON EX-ARGENTINE PRESIDENT KIRCHNER TO TESTIFY IN DERIVATIVES CASE (Dow Jones Institutional News)

3. MAJOR JURASSIC FOSSIL SITE FOUND IN ARGENTINA (Discovery.com)

1. ARGENTINE PM CONFIDENT DEBT DISPUTE CAN END WITHIN WEEKS -PAPER (Reuters News)
28 February 2016

ROME, Feb 28 (Reuters) – Argentina’s president is confident that long-running litigation over billions of dollars in defaulted bonds can be resolved within weeks, he said in an interview published on Sunday.

Cash-strapped Argentina has been battling creditors for more than a decade after it defaulted on about $100 billion in sovereign debt. A deal could allow it to go back to global capital markets for financing.

“I am confident the court proceedings with the creditors can be closed within a couple of weeks; confident and optimistic,” President Mauricio Macri, who was elected in November on an open-markets platform, said in an interview with Italian newspaper Corriere della Sera during a visit to Rome.

Settlement talks have been making progress, a mediator said last week, after creditors who have been suing Argentina in U.S. courts said that broad terms of an agreement were in place.

Since taking office, Macri has lifted trade and currency controls, triggering a steep fall in the local peso. He has also reduced taxes on farmers and ditched export curbs in an effort to increase production.

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2. JUDGE CALLS ON EX-ARGENTINE PRESIDENT KIRCHNER TO TESTIFY IN DERIVATIVES CASE (Dow Jones Institutional News)
By Taos Turner
26 February 2016

BUENOS AIRES–A federal judge called on former President Cristina Kirchner to testify in court over accusations that her central bank president cost Argentina’s government billions of dollars by illegally trading derivatives.

Federal Judge Claudio Bonadio made the request Friday as part of an investigation into allegations that the central bank sold $17 billion worth of dollar futures contracts at artificially low prices.

The judge called on Mrs. Kirchner to testify April 13. Mrs. Kirchner’s allies immediately took to social media networks to call for a mass protest at the federal courthouse that day.

Judge Bonadio’s request comes after allies of President Mauricio Macri in October filed a criminal complaint against Alejandro Vanoli–then the central bank’s president–for selling futures contracts for 10.6 pesos to the dollar when the market rate was closer to 15 pesos.

Mr. Vanoli couldn’t be reached Friday for comment.

After taking office in December, Mr. Macri devalued the peso, which now trades at around 15.60 to the dollar. For the central bank to fulfill the contracts sold at 10.60 pesos to the dollar, it has to fund the difference.

In a three-page legal filing Friday, Judge Bonadio said this cost the bank about $500 million in December and January alone. He indicated the bank could lose another $2.6 billion when it pays out contracts between now and June.

Mrs. Kirchner couldn’t be reached for comment.

The judge also called for testimony from Mr. Vanoli, former Minister of Economy Axel Kicillof and a dozen other former officials.

When reached for comment, a representative for Mr. Kicillof referred The Wall Street Journal to a Friday interview on Radio del Plata.

“This case was pushed by people that are now in Macri’s government,” Mr. Kicillof said in the interview. “The case is baseless. They devalued and now they’re blaming the cost of the devaluation on us.”

Bernardo Saravia Frías, an attorney who helped write the criminal complaint last year, said the central bank was the only entity offering dollars at below-market rates. “This allowed for a few sophisticated investors to make a lot of money, but it also cost the country a lot of money,” he said.

If any officials were convicted of breaking the law by approving of the sale of the futures contracts, they could face up to six years in jail, Mr. Saravia Frías said.

“The judge made this decision on the suspicion that officials may have committed a crime,” said Ricardo Gil Lavedra, another attorney who wrote the criminal complaint. “He is calling on them testify to see what they have to say. Once that happens, he will have to either indict them or dismiss the accusations.”

Judge Bonadio couldn’t be reached and Argentina’s central bank declined to comment.

From a legal standpoint, the central bank’s charter allows it to sell derivatives at market rates.

Mr. Vanoli has said that by selling the dollar futures the bank was simply trying to keep the peso stable and avoid a currency devaluation. He has defended his actions, saying that Argentina’s 2016 budget called for an exchange rate similar to that included in the futures contracts.

Mr. Vanoli couldn’t be reached Friday for comment.

“It’s a pity that the current government carried out a currency devaluation,” a tweet posted on Mr. Vanoli’s Twitter account said Friday.

3. MAJOR JURASSIC FOSSIL SITE FOUND IN ARGENTINA (Discovery.com)
Feb 28, 2016

Paleontologists in Argentina have announced the discovery of a major Jurassic-era fossil site four years after it was first discovered.

The site, which spans 23,000 square miles in Patagonia in southern Argentina, came to light this week with the publication of a report in the journal Ameghiniana.

“No other place in the world contains the same amount and diversity of Jurassic fossils,” said geologist Juan Garcia Massini of the Regional Center for Scientific Research and Technology Transfer (CRILAR).

Coaxing Patagonia Back To Its Natural State

The fossils — between 140 and 160 million years old — lie on the surface because they were recently exposed by erosion, said Garcia Massini, who leads the research team investigating the site.

“You can see the landscape as it appeared in the Jurassic — how thermal waters, lakes and streams as well as plants and other parts of the ecosystem were distributed,” he said.

The fossils were preserved almost immediately, in less than a day in some cases.

Dinos Got High, Oldest Grass Fungus Fossil Hints

“You can see how fungi, cyanobacteria and worms moved when they were alive,” Garcia Massini said of the site that lies along the Deseado Massif mountain range.

Ignacio Escapa of the Egidio Feruglio Paleontology Museum said the researchers had found “a wide range of micro and macro-organisms.”

The fossils are so well preserved, that researchers say each rock extracted from the site could possibly open the door to a new discovery.

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ARGENTINE UPDATE – Feb 22 & 23, 2016

23 febrero, 2016

1. ARGENTINA’S NEW PRESIDENT TAKES ON DEBT, DRUGS AND TERRORISM (The Washington Post)

2. JUDGE DEALS SETBACK TO HOLDOUTS IN NEGOTIATIONS WITH ARGENTINA (The New York Times)

3. ARGENTINA IN CONDITIONAL VICTORY AGAINST ‘HOLDOUT’ HEDGE FUNDS (FT.com)

4. ARGENTINA SIGNS, SEALS AND DELIVERS $1B BOND DEAL ON LOOSE LEAF (CNBC.com)

5. AN END IN SIGHT: ARGENTINA WINS A VICTORY AGAINST ITS HEDGE-FUND CREDITORS (The Economist)

6. ARGENTINA RULING TO SUPPORT BONDS AS HOLDOUTS LOSE LEVERAGE (Bloomberg Business)

1. ARGENTINA’S NEW PRESIDENT TAKES ON DEBT, DRUGS AND TERRORISM (The Washington Post)
By Lally Weymouth
21 February 2016

During their joint 12-year rule, Presidents Cristina Fernà¡ndez de Kirchner and Néstor Kirchner isolated Argentina from the world, cut it off from the global economy and drained its treasury. Now the country has a new leader: Mauricio Macri, just two months into his first term, is trying to restore Buenos Aires’s standing. His immediate task is to end a dispute with U.S. creditors that began after the country defaulted on its debt in 2001; American hedge fund managers argued in a U.S. court that Argentina shouldn’t be allowed to pay new bondholders until it paid off the old ones, thus freezing it out of international credit markets. Macri spoke with The Washington Post’s Lally Weymouth in his office in the Casa Rosada, Argentina’s White House, about the economy, Venezuela and alleged Iranian terrorists in the nation’s capital. Edited excerpts follow.

We made possible what was really impossible. At some moment the Argentinian people decided to change and move forward, and lose the ties with our past and to better our future.

Yes, unfortunately they succeeded in isolating Argentina. But the Argentinians have decided that this is the time to move forward. In addition to incredible natural resources, we have unique human resources. Even if what we have inherited from the past government is not the best scenario, it will not stop us from developing the country and fulfilling my principal commitments.

Yes, hundreds of millions. It’s pretty incredible. TV, newspapers and radio.

Exports, imports, outflows, inflows – we have unified the exchange rate.

Yes.

They were afraid it would cause a worse crisis than the one we were suffering. But I was sure that our problem wasn’t the exchange rate. Our problem is trying to reduce inflation. My main commitment that I assumed during the campaign is to gain a country with zero poverty.

Yes, keeping the electricity subsidies for lower-class people and reducing them for the other social levels.

We are trying to solve all the conflicts that we inherited with the world – starting with the holdouts [among the U.S. hedge funds mulling the bond deal]. I am quite optimistic. We have already reached an agreement with some of them, and we expect to reach a reasonable agreement with all of them in the next couple of weeks.

Yes, we have an open and fair attitude to a final agreement; that is what we have already expressed to the [American] mediator named by the judge [Thomas Griesa, a New York federal judge presiding over the case].

Yes. . . . The origin of this inflation is that we had a government that, even though it increased taxes, still accumulated increasing deficits. We are committed to reducing our expenses so as to keep reducing inflation. We expect to come back to one-digit inflation in less than three years.

Now it is at 28 or 30 percent.

That is right. I am ready for a long-term, mature relationship that is productive for both of us. We want to be part of the 21st century. There is no room for isolation. . . . The only people who were damaged were Argentinians. [The day after this interview, President Obama announced that he will visit the country in March.]

In the tough moments that we suffered under the military government here, we had many refugees from Argentina going to live in Venezuela. Venezuela always cared for our human rights. So I am doing exactly what they have done in the past for us.

I am ready to be the voice to defend human rights in the whole world. Argentina wants to be part of the nations that are battling against terrorism and drug trafficking and defending human rights and democracy.

First, we have to recognize we have a problem. The last government always denied that we were having a huge increase in drug trafficking in Argentina. Now we are starting to work seriously on the matter, purchasing radar to control our frontiers. But things are not going to change overnight.

They did the same thing with inflation. They fired the experts who worked at the National Bureau of Statistics and started to declare what they wanted, not what was really going on. Now we are committed to work with the truth. Ruling a country means that you have to be committed to the truth.

In Argentina we are changing to a whole new generation of politicians. They share my idea that Argentina has to be part of the 21st century and has to have an important role in Latin America and the world. Under my agenda of zero poverty and improving the quality of our democracy, many leaders of the opposition are willing to work together.

Both subjects are related. The prosecutor was denouncing the president and her cabinet, saying this [agreement] was illegal. Suddenly, a couple of days after this, Nisman was found dead. So now we have to solve both questions – was Nisman right to denounce the [deal]? Second, why is Nisman dead? His family and others are saying he was murdered. So we need to know the truth. Again, for me, ruling a country is saying the truth.

We are talking about renewable energy in addition to shale gas [and food-prodution]. … Strategic sectors can grow a lot, and we can double our exports in less than 10 years.

The best years for Latin America, yes. It depends on what happens in the future with China.

It affects everybody in the world. But the prices we get, especially for our agribusiness produce, are good.

Yes, but they didn’t build up a long-term relationship. China was a way to solve short-term problems [with currency swaps]. My idea is to transform this relationship in a strategic way. We need to export more value-added products to China, not only commodities. And we can buy from them some of the infrastructure we need.

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2. JUDGE DEALS SETBACK TO HOLDOUTS IN NEGOTIATIONS WITH ARGENTINA (The New York Times)
By Alexandra Stevenson
Feb. 19, 2016

A federal judge presiding over a long-running battle between Argentina and a group of New York hedge funds said on Friday that he would lift an injunction that had locked Argentina out of international markets.

The ruling represents a sharp turnaround by Judge Thomas Griesa of the United States District Court in Manhattan, who had previously prevented Argentina from raising new money or paying its creditors before paying investors holding its defaulted debt.

These investors — known as holdouts — include a group of hedge funds led by NML Capital, a unit of the billionaire Paul E. Singer’s Elliott Management. They have battled with Argentina for more than a decade in a fight that stems from 2001, when the country defaulted on nearly $100 billion of debt.

Argentina later offered twice to restructure the bonds for new and cheaper ones, but the holdouts refused and won a series of victories in the United States courts in recent years. Friday’s ruling now weakens the hand of the holdouts in negotiating with Argentina.

In his ruling on Friday, Judge Griesa said he would drop the injunctions after Argentina repeals domestic laws that prevent the country from making payments to the holdouts and makes full payments to bondholders who settle with Argentina by Feb. 29.

The creditors and Argentina’s previous president, Cristina Fernández de Kirchner, reached an impasse after years of mudslinging and rulings that led the country to default on its debt again in 2014.

Ms. Fernández de Kirchner and her administration called the hedge funds “vultures” and “financial terrorists,” and went as far as denigrating Judge Griesa.

All those years, Argentina “never seriously pursued negotiations toward settlement,” Judge Griesa wrote in his ruling on Friday.

“All that has changed,” the judge added, referring to the newly elected president, Mauricio Macri, who has pledged to resolve the debt dispute as part of a bigger plan to overhaul Argentina’s economy.

In recent weeks, Mr. Macri’s administration has moved to settle with several other holdouts, striking a $1.35 billion settlement with a group of Italian investors, among several other deals. On Feb. 5, after a week of intense negotiations with the group of six holdout hedge funds, it offered to pay $6.5 billion in an effort to put the battle behind it.

Two hedge funds — Montreux Partners and Dart Management — accepted the proposal, which would amount to three-quarters of a $9 billion claim on defaulted bonds.

The four others funds, which include NML Capital and Aurelius Capital Management, a hedge fund run by the former Elliott trader Mark Brodsky, have continued to reject the proposal.

If the court were to refuse to vacate the injunctions now, “it would unfairly deny those plaintiffs the opportunities to resolve their disputes amicably with the Republic,” Judge Griesa wrote on Friday.

He added that “vacating the injunctions serves the public interest by encouraging settlement to resolve disputes generally — particularly such protracted ones — as well as the concern for finality in this particular litigation.”

The ruling is also conditioned on a federal appeals court giving Judge Griesa the green light to go ahead.

“To think that after all that Elliott’s been through, that they could be outfoxed at this late hour — incredible, Macri’s a genius,” said one hedge fund manager who has not been involved in the dispute, but has watched it closely and has investments in Argentina.

Aurelius declined to comment, as did a spokesman for NML Capital.

Argentina had hoped to get the injunctions vacated first, so it could raise new money to pay the settlements it is reaching. But referring to Judge Griesa’s decision that the government pay the bondholders as a condition for his lifting the injunctions thereafter, Yael Bialostozky, the chief spokeswoman for Argentina’s Finance Ministry, said: “There was no surprise here. We keep progressing to close out agreements with the greatest possible number of bondholders.”

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3. ARGENTINA IN CONDITIONAL VICTORY AGAINST ‘HOLDOUT’ HEDGE FUNDS (FT.com)
By Benedict Mander
February 21, 2016

After winning a victory in its decade-long battle with a group of US hedge funds in a New York court, attention now switches to Argentina’s congress.

Judge Thomas Griesa said on Friday that he would lift a controversial financial blockade preventing Argentina’s access to the international capital markets.

The ruling was made on the condition that Argentina repeals laws stopping it from paying “holdout” creditors that refused debt restructurings after its 2001 default on $100bn, and then pays in full those holdouts that reach an agreement with Buenos Aires before the end of February.

The injunction was put in place after the holdouts, led by US billionaire Paul Singer’s Elliott Management, won a legal victory in 2012 in which Judge Griesa ordered Argentina to pay them in full at the same time as holders of restructured debt. The refusal to pay the holdouts by former president Cristina Fernández precipitated the eighth default in Argentina’s history in 2014.

But the victory of the market-friendly Mauricio Macri in November’s presidential elections led to a radical change in Argentina’s approach, with an offer to pay the holdouts $6.5bn earlier this month for claims of $9bn.

“Put simply, President Macri’s election changed everything,” wrote Judge Griesa in the ruling late on Friday, explaining why he was willing to lift the injunctions. “The injunctions must not be turned through changing circumstances into an instrument of wrong,” he added.

Although Judge Griesa currently lacks jurisdiction to lift the injunction immediately due to a pending appeal, the indicative ruling made clear how he will proceed when he does have jurisdiction.

Observers were surprised by the speed of the 85-year-old judge’s 35-page ruling, which came just a day after the holdouts filed lengthy arguments to the court justifying why the injunctions should remain in place, at Argentina’s request. There was no oral hearing despite requests for one by the holdouts.

The centre-right Mr Macri, who is on a mission to attract much-needed foreign investment, must now convince Argentina’s congress to revoke the laws currently preventing payouts to holdouts as requested.

Congress is likely to support Mr Macri, according to Juan Germano, a political analyst, even if there may be a noisy negotiation process. “We are on course to untangle this conflict,” he said.

“For Argentina, this is very important. It clears the way for the solution of the problems we are trying to solve,” said Daniel Marx, a former finance secretary. It will allow Argentina to return to the international stage after a long period of isolation, he said, while enabling the country to borrow at lower interest rates and finance the economic transition that is under way after a decade of populist and interventionist policies.

Nicolás Dujovne, an economist, explained that Argentina’s ability to borrow abroad again would help in its battle to reduce inflation of about 30 per cent, which many analysts see as the biggest challenge facing Mr Macri as sensitive wage negotiations with trade unions begin.

While the previous government resorted to printing money to finance a bulging fiscal deficit, which only fuelled inflation, a resolution to the holdouts saga would enable the government to issue foreign debt instead.

Although a removal of the injunction would put an end to Argentina’s 2014 default and allow it to resume paying the owners of restructured debt, it would not guarantee an end to the dispute with the holdouts, as they could appeal against the judge’s decision. “This may turn into a pyrrhic victory if indeed litigation now swamps further negotiations,” said Charles Blitzer, a former IMF official.

But Mr Dujovne is optimistic, arguing that there is willingness on both sides to reach a deal, and that their positions are not far apart. He said that Argentina was offering a similar deal to the one that the holdouts allegedly accepted before the default in 2014, which the government then withdrew.

“It seems difficult for there not to be a deal,” said Mr Dujovne, venturing that an agreement could even be announced by the end of the month.

If Argentina succeeds in overturning the legislation as requested by the judge and proceeds to pay the holdouts who accept a deal, a lifting of the injunction would weaken the holdouts’ leverage in the negotiations.

But they could appeal against the move, potentially triggering a renewed legal battle that could make what has been dubbed the “trial of the century” for sovereign debt drag on for even longer if a swift deal is not reached.

4. ARGENTINA SIGNS, SEALS AND DELIVERS $1B BOND DEAL ON LOOSE LEAF (CNBC.com)
By Dawn Giel
Saturday, 20 Feb 2016

The 15-year saga of Argentina’s record debt default took a step closer to closure this week with an unusual court filing.

The standoff finally hit a turning point when Argentina ushered in its new president, Mauricio Macri, who vowed to resolve the bitter legal dispute. On February 5, following face-to-face negotiations between creditors and representatives from Macri’s administration, Argentina unveiled publicly a tender offer to pay $6.5 billion—of the total $9 billion—owed to the leading debt holders.

As a result, the South American nation settled a nearly $1 billion obligation with hedge fund EM Limited, one of six major bondholders locked in a long running legal dispute with the country. According to a court document filed this week, the deal was sealed in a decidedly unorthodox way: It was drafted and signed by both parties on a sheet of loose-leaf paper.

“The parties agree to cooperate with each other in all respects to accomplish this settlement and to execute all papers necessary to accomplish this objective,” the document read. It was signed by a representative for EM and Luis Caputo, Argentina’s secretary of finance.

Also included in the document was an email between lawyers representing both Argentina and EM Limited, delineating the settlement amount as just in excess of $849 million.

However, the settlement is subject to two conditions. The Argentine Congress must approve the deal, and an injunction that has been in place since 2012 must be lifted. That clause essentially prevents Argentina from paying existing bondholders of its restructured debt unless holdout creditors are also paid.

The latter condition was given the green light on Friday when the U.S. District Judge overseeing the case, Thomas Griesa, ruled in Argentina’s favor and agreed to remove the injunction—albeit, the ruling is dependent on a federal appeals court ruling.

In 2001, Argentina’s suffered what was at the time the world’s largest sovereign debt default. Although much of that debt was restructured, some of the country’s more aggressive bondholders legally have been battling for full payment in various jurisdictions across the globe for more than decade.

NML Capital, a subsidiary of billionaire Paul Singer’s Elliott Management and one of the six major creditors, even went as far as Ghana to detain an Argentine Naval vessel, the ARA Libertad, in an attempt at repayment.

Another hedge fund, Montreux Partners—who together with EM Limited account for about 14 percent of the total outstanding claims—also accepted Argentina’s proposed settlement terms. Together, both settlement deals exceed $ 1 billion.

Elliott Management declined to comment to CNBC on Judge Griesa’s decision. However, in a court document filed Thursday, the holdout creditors stated that “granting the relief Argentina seeks would simply delay resumption of negotiations by requiring Plaintiffs to return to the Second Circuit.”

5. AN END IN SIGHT: ARGENTINA WINS A VICTORY AGAINST ITS HEDGE-FUND CREDITORS (The Economist)
Feb 21st 2016

A new ruling in New York augurs well for a long-awaited resolution with holdout bondholders

ARGENTINA has had plenty of setbacks in its efforts to resolve its mammoth sovereign default of 2001. Although some of its jilted bondholders accepted a big write-down of the money they were owed in restructurings agreed in 2005 and 2010, others held out for full payment. They enlisted the support of an American judge, Thomas Griesa (the original bonds were written under American law). He not only upheld their claim, but barred any banks with operations in America from facilitating payments on the restructured bonds until the holdouts were paid in full. That prompted a fresh default, in 2014. The Argentine president of the day, Cristina Fernández de Kirchner, railed against the “senile” Mr Griesa and the “vulture funds” he was helping. But Mr Griesa has now done Argentina a favour.

On February 19th Mr Griesa said he would lift the injunction that prevents Argentina from servicing its restructured debts under certain conditions. The judgment is a blow to the remaining holdout creditors, led by Elliott Management, a hedge fund, who had used it to press Argentina for full payment. Mr Griesa’s change of heart stems from a change in Argentina’s government. In December Mauricio Macri replaced Ms Fernández, vowing to resolve the dispute with the holdouts. The new government has already struck deals with some of the curmudgeonly creditors. Earlier this month it settled with a group of Italian holdouts. On February 5th it made a new proposal to the American ones, offering to pay $6.5 billion of their $9 billion claim. Two of the six largest American holdouts accepted the offer. It is a far cry from Ms Fernández’s flat refusal to reward the holdouts in any way for their intransigence. “President Macri’s election changed everything,” Griesa wrote. “The Republic has shown a good-faith willingness to negotiate.”

The latest ruling deprives the remaining holdouts of crucial leverage over the Argentine government and improves the chances of a swift resolution to the debt saga. “It’s the most important development in the last couple of years,” says Juan Cruz Díaz of Cefeidas, an advisory firm. “There is now light at the end of the tunnel.”

The light is still some way off, however. Argentina had sought to overturn the injunction at the Court of Appeals, which will now have to remand the case back to Mr Griesa’s court to enable it to be lifted. And then there are Mr Griesa’s conditions: he wants Argentina to pay those who accept a deal by the end of the month. He also wants the government to repeal legislation designed to block deals with the holdouts. The “Ley Cerrojo” (Padlock Law) was passed in 2005 to prevent the debt-restructuring deal Argentina had just struck from being reopened at a later date. It was suspended to allow for a second restructuring in 2010, but remains on the books.

Repealing the law will be the first big test of the government’s ability to garner support from parties outside its governing coalition. “We’re optimistic,” Marcos Peña, the cabinet secretary charged with liaising with Congress, said in a radio interview on February 20th. “There is an understanding in Congress that we have to resolve this. We’ll start negotiations in the coming days but we’ve been chatting about it for a while already.”

The challenge has become somewhat easier since February 3rd, when 18 deputies from Front for Victory (FPV), the party of Ms Fernández, broke away to form their own, more moderate, “Justicialist Bloc”. The defection means the FPV is no longer the biggest group in the lower house. That will make it harder to block the new government’s proposals. Diego Bossio, one of the defectors, says the bloc wants to work with the new government to repeal the Padlock Law. By exploiting divisions within Peronism, Mr Macri hopes to be able to release Argentina from a dispute which has distracted its politicians for long enough.

6. ARGENTINA RULING TO SUPPORT BONDS AS HOLDOUTS LOSE LEVERAGE (Bloomberg Business)
By Katia Porzecanski, and Bob Van Voris
February 22, 2016

Ø U.S. judge moved to end injunction that hedge funds sought

Ø Bank of America predicts restructured notes will rally

Argentina is on the cusp of returning to international capital markets for the first time since its 2001 default as a favorable U.S. court ruling puts pressure on creditors to settle their legal claims against the government.

Bank of America Corp. said the country’s bonds are likely to rally after a judge agreed Friday to drop orders that barred Argentina from issuing new notes or paying restructured debt, part of a decade-old court battle with hedge funds. The dispute had dragged on growth and left Argentina exposed to creditors’ attempts to seize its assets.

U.S. District Judge Thomas Griesa’s decision means that investors led by billionaire Paul Singer’s Elliott Management Corp. have lost much of the leverage they had to push for better terms in talks over compensation for bonds left over from the $95 billion default. Argentina has already agreed to pay more than $1 billion to other creditors as newly elected President Mauricio Macri makes good on pledges to reach deals that would lure investment and financing to South America’s second-largest economy.

“We expect many more funds to accept the offer now as they are losing much of their bargaining power,” said Jane Brauer, a strategist at Bank of America in New York. “We’ve been overweight Argentina in anticipation that a settlement might take place in the next four to five months, but this is going faster than we expected. We think the bonds have more room to run.”

Griesa’s decision is contingent on the nation repealing laws that bar paying the holdouts, and on the approval of a federal appeals court. If that happens, the injunctions will be automatically lifted as soon as Argentina pays investors who have settled their claims by Feb. 29. Once the injunctions are removed, Argentina will no longer be blocked from paying those investors who agreed to debt exchanges in 2005 and 2010.

Daniel Marx, a former Argentine finance secretary and head of consulting firm Quantum Finanzas, said last week that the country will need to issue as much as $20 billion of debt this year to settle with the holdouts and finance a fiscal deficit.

The country’s benchmark bonds due 2033 have jumped this year to a record 118 cents on the dollar as of Friday. They were little changed on Monday, with the yield up two basis points at 6.36 percent at 6:03 a.m. in New York.

“Argentine bonds can go a bit higher, not necessarily much higher,” said Regis Chatellier, a strategist at Societe Generale SA in London. “The market largely anticipated a positive outcome.” For new bonds, “there should be high demand because carry is still a big decision factor,” he said.

‘Credit Positive’

The nation stopped payments on the securities in 2014 because of the court ruling, which said it couldn’t service that debt without paying the holdout creditors. Argentina owes $3 billion in overdue interest on the restructured bonds, according to Bank of America.

“This is credit positive for the country, which is now just a step away from returning to capital markets,” said Alejo Czerwonko, a New York-based emerging markets strategist at UBS Wealth Management. “The next step will be to get congressional support, which we’re confident won’t be a problem.”

Argentine cabinet chief Marcos Pena said Saturday that the government, provincial governors and lawmakers generally agree that repealing the law is necessary, according to an e-mailed statement. Argentina’s congress reconvenes in March.

Ahead of Griesa’s decision, the holdouts had argued the injunctions should remain in place because dropping them would “upend the negotiations that only now are just beginning in earnest.”

Market Pariah

They also said that Argentina hadn’t spent much time meeting with the bondholders before going public with a settlement offer they called an “ultimatum” that favors some creditors over others. Under the proposal, some bondholders will be repaid 100 percent of their claim, while others will suffer losses of as much as 30 percent.

Michael O’Looney, a spokesman for Elliott, declined to comment on the decision.

Argentina has been a pariah in global markets since the 2001 default. Under President Nestor Kirchner and then his wife, Cristina Fernandez de Kirchner, the government took a growing role in the economy and seized private businesses. By the time Fernandez left office in 2015, the country was seeing anemic economic growth amid a shortage of dollars and inflation that exceeded 25 percent.

Macri, a 57-year-old Buenos Aires native, had campaigned on a pledge to quickly reverse much of the Kirchners’ policies and open up the economy to investment.

“Markets should rejoice on this surprise decision” by the U.S. court, Siobhan Morden, the head of Latin American fixed-income strategy at Nomura Holdings Inc., said in a note. “This marks an end to a historic era.”

TUESDAY

1. BUENOS AIRES ‘ON COURSE TO UNTANGLE CONFLICT’ WITH HOLDOUTS; ARGENTINA: RETURN TO CAPITAL MARKETS (Financial Times)

2. ARGENTINA REACHES SETTLEMENT WITH SEVERAL BONDHOLDERS (Dow Jones Institutional News)

3. PRESS RELEASE: STATEMENT OF DANIEL A. POLLACK, SPECIAL MASTER IN ARGENTINA DEBT LITIGATION, FEB. 22, 2016 (Dow Jones Institutional News)

4. ARGENTINA MOVES TO DROP U.S. APPEAL OVER LOCAL BOND PAYMENTS (Reuters News)

5. ARGENTINA BONDS JUMP AS JUDGE SAYS COULD LIFT INJUNCTION (Reuters News)

6. AN END IN SIGHT; ARGENTINA WINS A VICTORY AGAINST ITS HEDGE-FUND CREDITORS (News Analysis from Economist.com)

7. WILL ARGENTINA’S ECONOMY FINALLY START TO RECOVER IN 2016? (Forbes.com)

8. ANCIENT ARMORED MAMMAL FROM ARGENTINA WAS A HUGE ARMADILLO (Business Insider)

1. BUENOS AIRES ‘ON COURSE TO UNTANGLE CONFLICT’ WITH HOLDOUTS; ARGENTINA: RETURN TO CAPITAL MARKETS (Financial Times)
By Benedict Mander
22 February 2016

New York judge poised to lift financial blockade against the country, subject to conditions

After Argentina’s victory in its decade-long battle with a group of US hedge funds in a New York court, attention now switches to the country’s congress.

Judge Thomas Griesa said on Friday he would lift a financial blockade barring Argentina’s access to the international capital markets. The ruling was made on the condition that Argentina repeals laws stopping it from paying “holdout” creditors that refused debt restructurings after its 2001 default on $100bn, and then pays in full those holdouts that reach an agreement with Buenos Aires before the end of February.

The injunction was put in place after the holdouts, led by US billionaire Paul Singer’s Elliott Management, won a legal victory in 2012 in which Judge Griesa ordered Argentina to pay them in full, at the same time as it paid holders of restructured debt. The refusal by the former president Cristina Fernández to pay the holdouts precipitated the eighth default in Argentina’s history, in 2014.

But the victory of the market-friendly Mauricio Macri in November’s presidential elections led to a radical change in approach, with Argentina offering to pay the holdouts $6.5bn this month, for claims of $9bn.

“Put simply, President Macri’s election changed everything,” wrote Judge Griesa in the ruling late on Friday. “The injunctions must not be turned through changing circumstances into an instrument of wrong,” he added. Although he cannot lift the injunction immediately, as an appeal is pending, the indicative ruling made clear how he will proceed when he does have jurisdiction.

Observers were surprised by the speed of the judge’s ruling, which came a day after the holdouts filed lengthy arguments, at Argentina’s request, justifying why the injunctions should remain in place. No oral hearing took place despite requests by the holdouts.

The centre-right Mr Macri – who is keen to attract much-needed foreign investment – must now convince Argentina’s congress to revoke the laws stopping payouts to holdouts.

Congress is likely to support Mr Macri, according to Juan Germano, a political analyst, though the negotiation process may be noisy. “We are on course to untangle this conflict,” he said.

Daniel Marx, a former finance secretary, said: “For Argentina this is very important. It clears the way for the solution of the problems we are trying to solve.” Once the injunction is lifted, he said, Argentina will be able to return to the international stage after a long period of isolation; it will also be able to borrow at lower interest rates and finance the economic transition that is under way after a decade of populist and interventionist policies.

Nicolás Dujovne, an economist, explained that Argentina’s ability to borrow abroad again would help in its battle to reduce inflation, which is about 30 per cent. Many analysts see this as the biggest challenge facing Mr Macri as sensitive wage negotiations with trade unions get under way.

While the previous government resorted to printing money to finance a bulging fiscal deficit, which only fuelled inflation, a resolution to the holdouts saga would enable the government to issue foreign debt instead.

Although a removal of the injunction would put an end to Argentina’s 2014 default and allow it to resume paying the owners of restructured debt, it would not guarantee an end to the dispute with the holdouts, as they could appeal against the judge’s decision. “This may turn into a Pyrrhic victory if indeed litigation now swamps further negotiations,” said Charles Blitzer, a former IMF official.

But Mr Dujovne is optimistic, arguing that there is willingness on both sides to reach a deal, and that their positions are not far apart. He said that Argentina is offering a similar deal to the one that the holdouts allegedly accepted before the default in 2014, which the government then withdrew.

“It seems difficult for there not to be a deal,” said Mr Dujovne, venturing that an agreement could even be announced by the end of the month.

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2. ARGENTINA REACHES SETTLEMENT WITH SEVERAL BONDHOLDERS (Dow Jones Institutional News)
22 February 2016

NEW YORK—Argentina has reached a settlement with several bondholders for $250 million and €185 million, a court-appointed mediator said Monday as the country continues work toward ending a debt crisis that has damaged its ability to maneuver financially abroad.

The latest deals boost to more than $1.5 billion the amount Argentina has committed in deals since President Mauricio Macri took office on Dec. 10.

Court-appointed mediator Daniel Pollack has announced a string of agreements over several weeks after Argentina announced it expected to pay about $6.5 billion to settle claims of about $10 billion by bondholders, including U.S. hedge funds.

The latest settlements involve bondholders including Lightwater Corp, Old Castle Holdings, VR Capital, Procella Holdings and Capital Ventures International, Mr. Pollack said.

The bondholders refused to swap their bonds at a steep discount when Argentina offered swaps in 2005 and 2010 to ease its financial crisis after it defaulted on $100 billion in bonds in 2001. They went to court instead, winning judgments.

Meanwhile, 93% of Argentina’s creditors accepted the exchange offers, trading their bonds for new ones worth between 25% and 29% of the original value of the bonds.

Mr. Pollack announced the latest settlements the day Argentina asked a Manhattan federal appeals court to drop oral arguments scheduled for Wednesday in one of several cases involving bondholders.

Argentina said in court papers filed with the 2nd U.S. Circuit Court of Appeals that it had decided to drop the appeals since Mr. Macri took office.

Lawyer Michael C. Spencer, representing bondholders involved in the cases set to be heard Wednesday, filed papers late Monday saying a lower-court judge was too eager to vacate court orders protecting bondholders and the appeals court should ensure bondholders remain protected by blocking their dismissal.

Mr. Spencer, saying he represented several hundred people and small-fund bondholders with claims of more than $832 million, complained that Judge Thomas Griesa was rushing to collapse the force of court orders against Argentina.

In a written ruling Friday, Judge Griesa noted that President Macri’s government has consistently declared a desire to resolve its disputes with foreign investors and that the new stance has been welcomed in the U.S., where Treasury Secretary Jacob Lew has commended it efforts.

Mr. Griesa said he recognized Argentina’s “earnest efforts to negotiate and its striking change in attitude” since Mr. Macri took office and was prepared to automatically lift court orders standing in the way of agreements with bondholders as soon as Argentina repeals all legislative obstacles to settlements and once it satisfies the terms of its deals.

“Allowing the republic to re-enter the capital markets will undoubtedly help stimulate its economy and thus benefit its people,” the judge wrote. “It might even encourage other indebted nations to choose compromise over intransigence.”

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3. PRESS RELEASE: STATEMENT OF DANIEL A. POLLACK, SPECIAL MASTER IN ARGENTINA DEBT LITIGATION, FEB. 22, 2016 (Dow Jones Institutional News)
22 February 2016

Statement Of Daniel A. Pollack, Special Master In Argentina Debt Litigation, Feb. 22, 2016

PR Newswire

NEW YORK, Feb. 22, 2016

NEW YORK, Feb. 22, 2016 /PRNewswire/ — Daniel A. Pollack, Special Master presiding over settlement negotiations between the Republic of Argentina and its “holdout” Bondholders issued the following statement today:

As Special Master, I am pleased to report that Agreements in Principle have now been reached by the Republic of Argentina with five other Bondholders for a total amount of approximately $250 million plus 185 million Euros. These Bondholders include Lightwater Corp, Old Castle Holdings, VR Capital, Procella Holdings and Capital Ventures International. I am continuing to work with the Republic of Argentina and all interested Bondholders to help them arrive at Agreements in Principle. These Agreements in Principle, like all others, are subject to two conditions: first, the lifting of the Lock Law and the Sovereign Payment Law, and second, the lifting of the Injunction by Judge Griesa. These Agreements in Principle are all within the framework of the February 5 Proposal issued by the Republic of Argentina, available to all Bondholders. I will have no further comment on this tonight.

To view the original version on PR Newswire, visit:
http://www.prnewswire.com/news-releases/statement-of-daniel-a-pollack-special-master-in-argentina-debt-litigation-feb-22–2016-300224203.html

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4. ARGENTINA MOVES TO DROP U.S. APPEAL OVER LOCAL BOND PAYMENTS (Reuters News)
22 February 2016

NEW YORK, Feb 22 (Reuters) – Argentina on Monday moved to drop its appeal of a U.S. judge’s ruling that blocked Citigroup Inc last year from processing interest payments to holders of $2.3 billion in bonds issued under the country’s local laws.

A federal appeals court in New York had been set to hear the case on Wednesday. But in court papers, Argentina’s lawyers said recently elected President Mauricio Macri’s administration had decided not to pursue the appeal.

The motion came after U.S. District Judge Thomas Griesa on Friday signaled his willingness to lift injunctions placed on debt payments owed to creditors that participated in past restructurings after the country’s $100 billion default in 2002.

Argentina earlier this month proposed paying $6.5 billion to resolve litigation with creditors that did not participate in those 2005 and 2010 restructurings and had been suing for payment on defaulted bonds.

A key lawmaker and analysts said on Monday that Argentina’s Congress was likely to repeal two laws that have blocked it from settling the litigation, which has hobbled the country’s finances. (Reporting by Nate Raymond in New York; Editing by Lisa Von Ahn)

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5. ARGENTINA BONDS JUMP AS JUDGE SAYS COULD LIFT INJUNCTION (Reuters News)
22 February 2016

NEW YORK, Feb 22 (IFR) – Argentina’s bonds rallied by up to two points on Monday after a favorable ruling on Friday in the country’s legal battle against holdout creditors.

Argentina’s 2033 Discount notes were among the most active on Monday morning, jumping by around two points to 120 in early trading. The 2038 Par bonds, meanwhile, rose by about a point to 65.5, according to a New York-based trader.

Late Friday, the judge presiding over Argentina’s decade-long battle with creditors who did not participate in its 2005 and 2010 restructurings, signaled he would be willing to lift an injunction preventing Argentina from servicing its foreign debt.

The injunction – which was meant to bring Argentina and holdouts to the negotiating table – forced the sovereign to default on its restructured bonds in 2014.

US Judge Thomas Griesa said that it would serve the public interest to lift the injunctions, provided that Argentina repeals two laws concerning its debts and pays all creditors who agree by February 29 to settle.

“It was the first favorable ruling from (US judge) Griesa towards Argentina and took the market by surprise,” said Siobhan Morden, head of Latin America fixed income strategy at Nomura.

A key Argentine lawmaker and analysts said on Monday that Congress is likely to repeal the two laws blocking settlements with creditors, Reuters reported.

Some profit-taking emerged after the early rise in prices with the Discounts quoted at 119 as of 09:00am.

“It’s hard to say (if there is more upside),” said a New York-based trader. “Flows here are two-way.” (Reporting by Davide Scigliuzzo; Editing by Jack Doran)

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6. AN END IN SIGHT; ARGENTINA WINS A VICTORY AGAINST ITS HEDGE-FUND CREDITORS (News Analysis from Economist.com)
21 February 2016

A new ruling in New York augurs well for a long-awaited resolution with holdout bondholders

ARGENTINA has had plenty of setbacks in its efforts to resolve its mammoth sovereign default of 2001. Although some of its jilted bondholders accepted a big write-down of the money they were owed in restructurings agreed in 2005 and 2010, others held out for full payment. They enlisted the support of an American judge, Thomas Griesa (the original bonds were written under American law). He not only upheld their claim, but barred any banks with operations in America from facilitating payments on the restructured bonds until the holdouts were paid in full. That prompted a fresh default, in 2014. The Argentine president of the day, Cristina Fernández de Kirchner, railed against the “senile” Mr Griesa and the “vulture funds” he was helping. But Mr Griesa has now done Argentina a favour.

On February 19th Mr Griesa said he would lift the injunction that prevents Argentina from servicing its restructured debts under certain conditions. The judgment is a blow to the remaining holdout creditors, led by Elliott Management, a hedge fund, who had used it to press Argentina for full payment. Mr Griesa’s change of heart stems from a change in Argentina’s government. In December Mauricio Macri replaced Ms Fernández, vowing to resolve the dispute with the holdouts. The new government has already struck deals with some of the curmudgeonly creditors. Earlier this month it settled with a group of Italian holdouts. On February 5th it made a new proposal to the American ones, offering to pay $6.5 billion of their $9 billion claim. Two of the six largest American holdouts accepted the offer. It is a far cry from Ms Fernández’s flat refusal to reward the holdouts in any way for their intransigence. “President Macri’s election changed everything,” Griesa wrote. “The Republic has shown a good-faith willingness to negotiate.”

The latest ruling deprives the remaining holdouts of crucial leverage over the Argentine government and improves the chances of a swift resolution to the debt saga. “It’s the most important development in the last couple of years,” says Juan Cruz Díaz of Cefeidas, an advisory firm. “There is now light at the end of the tunnel.”

The light is still some way off, however. Argentina had sought to overturn the injunction at the Court of Appeals, which will now have to remand the case back to Mr Griesa’s court to enable it to be lifted. And then there are Mr Griesa’s conditions: he wants Argentina to pay those who accept a deal by the end of the month. He also wants the government to repeal legislation designed to block deals with the holdouts. The “Ley Cerrojo” (Padlock Law) was passed in 2005 to prevent the debt-restructuring deal Argentina had just struck from being reopened at a later date. It was suspended to allow for a second restructuring in 2010, but remains on the books.

Repealing the law will be the first big test of the government’s ability to garner support from parties outside its governing coalition. “We’re optimistic,” Marcos Peña, the cabinet secretary charged with liaising with Congress, said in a radio interview on February 20th. “There is an understanding in Congress that we have to resolve this. We’ll start negotiations in the coming days but we’ve been chatting about it for a while already.”

The challenge has become somewhat easier since February 3rd, when 18 deputies from Front for Victory (FPV), the party of Ms Fernández, broke away to form their own, more moderate, “Justicialist Bloc”. The defection means the FPV is no longer the biggest group in the lower house. That will make it harder to block the new government’s proposals. Diego Bossio, one of the defectors, says the bloc wants to work with the new government to repeal the Padlock Law. By exploiting divisions within Peronism, Mr Macri hopes to be able to release Argentina from a dispute which has distracted its politicians for long enough.

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7. WILL ARGENTINA’S ECONOMY FINALLY START TO RECOVER IN 2016? (Forbes.com)
By Nathaniel Parish Flannery
FEB 22, 2016

Argentina will be an interesting country for investors to watch in 2016. Like the rest of Latin America, Argentina faces a difficult external environment for commodity exports. Argentina posted a $3 billion trade deficit in 2015. Argentina’s northern neighbor, Brazil, continues to struggle as well. General Motors has made the decision to cut automobile production in Argentina. Overall automobile production in Argentina fell by double digits in 2015 with exports dropping by more than 50%. Citigroup also recently announced a plan to sell its retail units in Brazil and Argentina. With a new president who is backed by the business community Argentina seems poised to start a new chapter. On February 19 a U.S. court lifted an injunction that had barred Argentina from issuing new bonds. “Put simply, President Macri’s election changed everything…The Republic has shown a good-faith willingness to negotiate with the holdouts,” Judge Thomas Griesa explained. At the same time, although there are some signs for optimism, Argentina still struggles with some of the worst inflation in the world. Argentine companies have made impressive growth in e-commerce but global online retailers such as Amazon and Wal-Mart still seem to paying more attention to Mexico than Argentina when it comes to e-commerce. To get a sense of what investors should expect from Argentina in 2016 I reached out to Jason Marczak, the Director of the Latin America Economic Growth Initiative at the Adrienne Arsht Latin America Center in Washington, D.C.

Nathaniel Parish Flannery: There seems to be some optimism about newly inaugurated President Macri. How big of a change is Macri from Cristina Fernandez de Kirchner?

Jason Marczak: In electing Mauricio Macri, Argentine voters chose the antithesis of Cristina Fernández de Kirchner. The eight years of Fernández de Kirchner ostracized Argentina from the global economy, while domestically, institutions weakened, insecurity festered, and cronyism ran rampant. Macri promised during the campaign to take the necessary measures—some unpopular—to restore the Argentine economy and to tackle the root causes of the deep malaise pervading across society. He is already acting on this promise.

Ultimately, Macri’s mandate is not just to jumpstart his country’s flagging economy, but to restore credibility to its economic institutions after years of clientelism and abuse of power. Of course, we need to remember that he also faces a litany of domestic, non-economic problems.

Four key decisions by Macri have already improved the administration’s appeal to foreign investors: a repositioning of international ties, a focus on removing capital controls, re-appointment of credible accountants for handling inflation data, and putting in place a well-experienced cabinet of technocrats.

Other long-overdue reforms could help to shed Argentina’s inward-looking, statist model of the past decade and raise its profile in the region. This creates a timely opening for new foreign trade and direct investment. Beyond Argentina, a Macri presidency represents a potential moment for the Mercosur trade bloc to seize upon Brazil’s troubles—turn crisis into opportunity—and become more outward oriented as well.

Parish Flannery: What are the biggest challenges that Macri will face as he works to steer Argentina out of troubled waters?

Marczak: Macri’s biggest challenge will be forging a deal to end Argentina’s long-running legal dispute with its ‘holdout’ creditors who declined to restructure bonds left over from its historic 2001 default. Without an agreement, the country will remain effectively locked out of most international credit markets: it has a limited ability to borrow and its foreign reserves are at a nine-year low. Unlike his predecessor, Macri will probably succeed in striking a deal with the holdouts. Just a few weeks into his term his government made a first formal proposal to end the stalemate with U.S. creditors. Still, he faces a greater struggle selling any deal with the so-called “vulture funds” to both Congress and the Argentine public.

Macri’s narrow electoral victory—a mere 2 percentage points over his opponent, Daniel Scioli—also means the president has limited maneuverability in choosing painful but long-overdue reforms. He will have to balance implementing the necessary economic adjustments while maintaining popular support. This will be his greatest domestic challenge.

Already, the immediate decision upon taking office in December to lift the strict exchange controls brought a 30% drop in the peso. Abolishing the artificially high rate of the peso promises to lure both U.S. dollars and foreign direct investment when both are most needed. The inflated value was not sustainable. But letting the markets decide the currency price brought an immediate political cost right before the Christmas season. More adjustments will mean more short-term pain but with medium- to long-term payoffs.

Parish Flannery: What’s your take on Argentina in the medium term? How to you see Argentina’s economy developing in comparison to the rest of Latin America over the next few years?

Marczak: Compared to Brazil’s indecisiveness in dealing with its own economic challenges, Argentina merits a healthy dose of optimism for medium-term growth. Macri’s has named young and well qualified technocrats. I’m paying attention to people like Finance Minister Alfonso Prat-Gay and Central Bank President Federico Sturzenegger who should be able to work well together while facing daunting internal challenges. Their field knowledge, commitment, and political savviness bodes well for Macri’s chances of effectively moving the currency exchange rate, modifying the pace of fiscal spending, and reducing inflation in the medium term.

It won’t be easy but a revived Argentine economy could outpace its neighbors with investment flowing in to sectors including energy and agriculture. Macri will seek to diversify Argentine trade beyond the agricultural commodities popular with China by bolstering value-added exports. His decision to strengthen frayed ties with the U.S. and Europe will also help to ensure that the economy is not tethered to the volatilities of the Chinese market.

Closer commercial ties with both the United States and European Union, either through a coordinated Mercosur deal or on its own, would consolidate Argentina’s international presence both economically and politically. But inking new commercial deals is not the only way Argentina can show the world that it is open for business. The better business climate that will come with a Macri presidency is emblematic of a wholesale change he seeks to bring about to society. The good of the Fernández de Kirchner era, namely social programs for the needy, is here to stay but what will change is giving institutions back the credibility and independence they once enjoyed.

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8. ANCIENT ARMORED MAMMAL FROM ARGENTINA WAS A HUGE ARMADILLO (Business Insider)
By Will Dunham
Feb. 22, 2016

WASHINGTON (Reuters) – DNA coaxed out of a 12,000-year-old fossil from Argentina is providing unique insight into one of the strangest Ice Age giants: a tank-like mammal the size of a small car with a bulbous bony shell and a spiky, club-shaped tail.

Scientists said on Monday their genetic research confirmed that the creature, named Doedicurus, was part of an extinct lineage of gigantic armadillos. Doedicurus was a plant-eater that weighed about a ton and roamed the pampas and savannas of South America, vanishing about 10,000 years ago along with many other large Ice Age animals.

“With a length of more than three meters (10 feet) from head to tail, it certainly looks like a small car, like a Mini or Fiat 500,” evolutionary biologist Frederic Delsuc of France’s Université de Montpellier, one of the researchers, said.

It was a member of a group called glyptodonts that shared the landscape with giant ground sloths, sabre-toothed cats and towering, flightless, carnivorous “terror birds.” Some glyptodonts made it as far north as southern portions of the United States, from what is now Arizona through the Carolinas.

The researchers were able to place Doedicurus and the other glyptodonts into the armadillo family tree after studying small fragments of DNA extracted from bits of the creature’s carapace. They used a sophisticated technique to fish mitochondrial DNA out from a soup of environmental contaminants that had leached into the fossil over the eons.

They determined the glyptodont lineage originated about 35 million years ago. The oldest armadillo fossil, from Brazil, was around 58 million years old.

Asked what someone might think upon encountering Doedicurus, another of the researchers, evolutionary biologist Hendrik Poinar of McMaster University in Canada said, “That’s the biggest armadillo-looking creature I’ve ever seen, and it has a tail like an Ankylosaurus. Yikes!”

Doedicurus resembles the dinosaur Ankylosaurus, which also was heavily armored and wielded a club-like tail.

The researchers said the resemblance was an example of “convergent evolution” in which disparate organisms independently evolve similar features to adapt to similar environments or ecological niches.

Scientists have debated whether humans contributed to the extinction of the glyptodonts. Poinar said he believed that humans played a role, saying most of the large mammals of that time were under pressure not only from climate change as Ice Age waned but also from human hunting.

The research was published in the journal Current Biology.

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Empobrecer al crimen organizado en Argentina

14 febrero, 2016

http://www.infobae.com/2016/02/12/1789681-hay-que-evitar-que-el-crimen-organizado-siga-acumulando-riqueza-argentina


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