Out There

Jul 1, 2004

Argentina's creditors complain that President Néstor Kirchner and Roberto Lavagna, his economy minister, act as if they are living on another planet.

Argentina has improved on its last debt repayment offer, but there is still a considerable distance between what the government says it can afford and what bondholders expect it will pay. Its "absolute" and "final" offer to creditors in June struck many as yet another proposal from a government out of touch with reality. Lavagna did not tell creditors about the repayment plan first, but announced it instead at a chaotically organized news conference held almost two weeks before filing the offer with the US Securities and Exchange Commission. The result was an offer shot through with inconsistencies, omissions and errors.

A senior international banker advising the government comments dryly that, "Making the announcement before the SEC filing is not standard operating practice. They had a political motivation to have something out there, to make a strong statement. This is more of a political, a presidential decision. We couldn't...

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