Default? What default? Argentina slams U.S. for using 'D' word

Tue Sep 16, 2014 3:14pm EDT
 
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By Hugh Bronstein

BUENOS AIRES (Reuters) - Argentina called in the United States' top diplomat in the country on Tuesday to express its "deep indignation" over a local newspaper interview in which he made reference the South American country's latest debt default.

Argentina missed a coupon payment on its restructured sovereign bonds in July after a U.S. judge ordered that $539 million deposited by Buenos Aires with an intermediary bank and intended for bondholders not be paid out.

Pointing to the fact that the government tried to make the payment, Argentina denies being in default.

U.S. chargé d'affaires in Argentina Kevin Sullivan nonetheless told local newspaper Clarin that "it is important that Argentina get out of default" in an interview published on Monday. Outside of government circles, the term default is commonly used in Argentina to describe the missed July payment.

Sullivan was called into the office of Foreign Minister Hector Timerman on Tuesday after Timerman issued a statement expressing "deep indignation and energetic rejection" of Sullivan's comments to Clarin.

"If this kind of intrusion into the internal affairs of Argentina is repeated, severe measures will be taken," Timerman's statement said.

Sullivan is Washington's ranking diplomat in Buenos Aires, as no replacement has been named since its ambassador to Argentina left last year. The U.S. embassy had no comment on the spat with the Argentine government or the Sullivan-Timerman meeting.

Debt is a touchy subject in Argentina after millions of people in the middle class were thrown into poverty in 2002 when the government defaulted on about $100 billion in bonds. More than 93 percent of the bad debt was swapped in 2005 and 2010 for paper offering less than 30 cents on the dollar.   Continued...

 
Construction workers work near posters that read "Enough vultures, Argentina united for a national cause" in Buenos Aires June 18, 2014. REUTERS/Enrique Marcarian