Vultures who fly from Washington

Manuel E. Yepe

18/08/2014

Opinión

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“The vulture funds --the small number of creditors who held out from Argentina's earlier debt restructuring-- had no interest in the country or its people. They picked up their bonds on the cheap, in hopes that by spending enough on litigation, they would eventually find a sympathetic judge who did not understand what was at issue and rule in their favor.”

Thus explains Professor Joseph E. Stiglitz, a Nobel laureate in economics and at Columbia University, who served as Senior Vice-President and Chief Economist of the World Bank.

“All investors in sovereign bonds know that there is a risk of default. That's why the bonds can pay a far higher interest rate than U.S. bonds. But anyone buying bonds after a country announces a debt restructuring knows with virtual certainty that they will not be repaid in full without manipulating the legal system,” says Stiglitz.

There is no system for sovereign debt restructuring, but this is a necessity because the growing complexity of the market makes it harder for developing nations to free themselves from debt, increasing inequality worldwide.

According to a work by journalist Greg Palast, published by London paper The Guardian and reproduced by Pagina 12 of Buenos Aires, President Obama could neutralize the action of the “vulture funds” if his administration had the political will.

The US president need only inform a federal judge that vulture fund billionaire Paul Singer is interfering with the president's sole authority to conduct foreign policy. But Obama hasn't done so.

Obama could prevent vulture hedge-fund billionaire Paul Singer –one of the most important and influential contributors to the Republican electoral campaigns– from collecting a single penny from Argentina by invoking the long-established authority granted presidents by the US constitution's "Separation of Powers" doctrine.

Under the principle known as "comity", Obama only need inform US federal judge Thomas Griesa that Singer's suit interferes with the president's sole authority to conduct foreign policy. Case dismissed.

In a legal analysis of the recent action by the government of President Cristina Fernández de Kirchner at the International Court of Justice in The Hague, also published in Pagina 12, Professor Marcelo Kohen, of the Graduate Institute of International and Development Studies in Geneva, also points out the responsibilities of the US Executive for the resolution of this conflict which not only threatens the stability of Argentina but –as Stiglitz pointed out– is a real "bomb" against the international economic and financial system, with unpredictable effects.

Regarding this case, the US State Department reported to federal Judge Thomas Griesa that the Obama administration agreed with the Argentine legal arguments; however, it did not invoke the magic doctrine that would stop the vultures.

Once again the US legal system is placed above International Law and national laws against Third World nations. This time, it subtly supports the predatory "vulture funds". They threaten to cause irreparable damage to a people waging an exemplary struggle for justice and development after many decades of independence with restrictions imposed by US hegemony.

It is not surprising that US courts support the unscrupulous creditors who are behind the "vulture funds". These are predator financial speculators who, taking advantage of a difficult situation in Argentina, bought some of its debt at ridiculous prices and try to make it pay today, through legal action, the total sums owed plus interest accumulated throughout the elapsed time.

The beneficiaries could be billionaires with capital of questionable origin in tax havens. In the past they provided financial support to genocidal dictatorships. These debts were acquired in the name of the people they badly ruled in favor of a privileged elite or holders of private accounts which grew fat acting as servile satraps of the oligarchies.

The U.S. complicity in this extortion is evident in the disregard of its President.

August 15, 2014.

A CubaNews translation. Edited by Walter Lippmann. http://www.walterlippmann.com/docs4155.html

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