Name? Alberto Ángel Fernández
Westphalian identity? Argentine
Why is he in the news? Fernández (not to be confused with the ex-President and current Vice-President Cristina Fernández de Kirchner) last week gave the authorisation for the Argentine Minister of Finance to miss a 500US$ million payment to institutional investors based in the United States. Argentina now has 30 days to either pay or negotiate with the creditors before it enters its 9th foreign debt since its independence in 1816.
Why do we care? The power of the vulture funds over Argentina cannot be underestimated. The question remains whether private citizens and vulture funds hold the right to push a sovereign state into default over refusing to negotiate with a country facing a slew of economic problems. Only the future can tell whether Fernández will be able to bring the vulture funds to the negotiating table and avoid Argentina entering its 9th default in 200 years.
Why should you care? Argentina will not be the only country to potentially default during times of viral trends and many will follow. The economic hardship that will fall upon all countries will push the limits of rational domestic politics and potentially challenge the current relative international relations stability that we have had over the last few years. Depending on how the Fernández vs. Vulture funds negotiations turns out, many other countries will have to prepare themselves for the eventuality of having to renegotiate their debt, countries that you may live in.
Who else cares? Argentina’s population does most certainly. Pension cuts, inflation and/or another recession, what else do they have to go through for a 9th time?
Any further comments? Imagine in a parallel universe Argentina would get out of this crisis and no longer require help. Would that impact the IMF’s right to exist? Do they actually do anything else but care about Argentina? It seems like all they do is come on the news every few months announcing yet another bailout of Argentina.