Changes in the calculation of GDP, lawsuits with unpaid sentences to creditors, problems in expropriations. Kirchnerism continues to accumulate court decisions whose economic cost is measured in the billions of dollars. In less than a week, the Argentine state has been called to pay more than 1.3 billion dollars in London and an amount not yet determined – but billions – in New York.
The problems with Coupon payments already rack up $2.65 billion between London and New York, according to Alfonso Prat Gayformer finance minister.
Since these cases are long-standing – the expropriation of YPF dates back to 2012 – there are still appeals that will delay the trials. In the case of YPF, the payment should be made in 2024. Judge Loretta Preska must establish how much the prize against Argentina reaches. But she has already warned that a deposit will have to be left.
The negotiations led by Axel Kicillof have cost the country more than 35,000 million dollars, according to Prat Gay himself, who succeeded Kicillof in the Ministry of Economy when Mauricio Macri’s government began.
The expropriation of YPF continues to be a major source of expenditure. Former Economy Minister Axel Kicillof (current governor of Buenos Aires) has compensated the Spanish company Repsol with 5 billion dollars for its stake in the oil company. It remains to be seen how much the Burford Fund will be paid for the YPF expropriation. Conservative estimates speak of 3.5 billion dollars, even though Burford had asked for compensation of 14 billion dollars.
Kicillof, who criticized the US judiciary for the Repsol sentence, is the author of other actions that have generated adverse judicial reactions. In 2015 there was a ruling in favor of Argentine debt creditors who had not entered into the public debt restructuring of 2005 and 2010. They called them “holdouts” and Kirchnerism called them “vulture funds”.
The creditors went to Judge Thomas Griessa, of the Southern District Court of New York, and obtained a favorable sentence. Former president Cristina Fernández de Kirchner (and current vice president) has decided to ignore that ruling. But the next administration, that of Mauricio Macri, wanted to recover access to external credit. And this was not possible with the “resistance” embargoes on Argentine goods (as happened with the Fregata Libertad).
To settle the resistance, the Macri administration had to shell out 12,627 million dollars, according to Prat Gay, one of the architects of the agreement. The agreement was ratified by Congress and paved the way for Cambiemos management to regain access to international credit.
Kicillof also signed a renegotiation in his management as economy minister. He was with the Paris club, a group of European creditors. As of April 30, 2014, the overdue debt with the Paris Club amounted to US$ 4,955 million. However, the settlement was for US$9,690 million: the difference is due to interest of US$1,102 million and default interest of US$3,633 million. Thus, the interest account increased the principal owed by 95.6%. Prat Gay understands that this late payment interest was excessive.
Between 2007 and 2014 there was also a statistical manipulation of the INDEC data. There some indicators have been changed. For example, the year-over-year improvement in GDP. As part of the 2005 debt restructuring, former Economy Minister Roberto Lavagna offered an “increasing” coupon. The proposal aroused enthusiasm. Creditors would get a head start if the country grows more than 3.26% annually. During the first few years, it was accomplished. But then INDEC changed its statistics -at the hands of Guillermo Moreno, now very critical of Alberto Fernández and Cristina Fernández de Kirchner-, and the creditors lost that sweetener. There has also been a lawsuit that will cost no less than $2,650 million.
There is also the so-called “future dollar” cause. The Central Bank sold dollars in the future – for when its management ended, after December 2015 – at a price that ended up being lower than the price reached at that moment. The government used the official dollar ($10 at the time), even though the “informal” price of the banknote – the one used by savers and many economic players – was $15. billion.
The renegotiation of Buenos Aires’ sovereign debt was also a mistake, according to Prat Gay. The former minister and lawmaker knows that the governor has added $2,764 million to the debt. “Payment obligations in the first 10 years went from $3,860 million in the original offer to $6,624 million” in which it was finally accepted by creditors, according to the opposition politician.
Source: Clarin
