The UN General Assembly today passed the bill that impelled Argentina to try to shield the process of restructuring of sovereign debt of the interference of the holdouts. It is a non-binding resolution that promotes the creation of a regulatory framework for such cases and already has a list of principles to deal.
The vote was favorable for the support of 136 countries, mainly in Latin America, Africa and Asia. There were 41 abstentions and six rulings against: US, UK, Canada, Germany, Israel and Japan.
Speaking to the assembly, Argentine Economy Minister Axel Kicillof, said that the approval is “a major step against attacks by vulture funds, as currently endured by Argentina and as other countries can suffer.”
The officer then called that the UN propose an amendment to the international financial structures “for a better and peaceful world, a world free of vultures”.
Among the “Basic Principles”, the text mentions “sovereign immunity” of states against foreign courts and respect of the majority in the restructuring process, under which decisions must be accepted backed by a qualified majority of creditors .
It also calls for the “sustainability” and believes that the restructuring of sovereign debt should preserve the rights of creditors, but also promoting “sustainable and inclusive growth” in the country, “minimize the economic and social costs” and “guarantee the stability of the international financial system and respect for human rights.”
The proposal, in the economic scene some people call it “Kicillof Doctrine”, establishes a period of negotiation and the establishment of a review committee process, and its objective prevent failures such as those issued US Judge Thomas Griesa against Argentina.
For Argentina, promoter of the initiative through the Group of 77 and China, it is international support in its legal battle against hedge funds that earned him a trial by 1,600 million dollars in US federal courts for debt default since 2001.
The resolution does not mention however to Argentina or the funds to calling them “vultures” for buying bonds in default to auction and then litigate in court, rejecting debt swaps 2005 and 2010 that included major removeand they were accepted by 93% of creditors.
The Argentina refuses to comply with a ruling by Judge Thomas Griesa in New York ruled in favor of the fund NML Capital and Aurelius, urging the Government to pay 1,600 million in principal and current interests.