Argentina is on the brink of the next major state bankruptcy. The government and private creditors have been fighting over a possible haircut for months. The latest offer from investors has been rejected.
In a dispute over a huge debt relief that has been going on for months, the Argentine government has rejected the latest counter offer by creditors. The new demands could not be met, said the Ministry of Economy in Buenos Aires. "That would not only be irresponsible, but also unfair," said a statement. "While 50 percent of children in Argentina live in poverty, we cannot increase the short-term profits of our creditors."
According to experts, the national debt of the second largest economy in South America is no longer sustainable given the current conditions. Argentina is therefore demanding that its private creditors waive some of their claims of around $ 66 billion. If no agreement is reached, the country threatens to go bankrupt again. It would be the ninth default in Argentine history.
Lenders recently called for higher government bond interest rates and changes to some contractual clauses. However, the Argentine government is sticking to its last offer and is not prepared to make any further concessions.
Argentina is in a serious financial and economic crisis. The inflation rate was more than 50 percent recently. The corona virus pandemic further complicates economic activity. Foreign demand is falling, large sections of the population have had to live with massive restrictions since March.
For the current year, experts anticipate a decline in Argentine economic power by around ten percent. At the end of May, Argentina had failed to pay $ 503 million in interest claims, causing it to default in payments.
. (tagsToTranslate) Economy (t) Argentina (t) Bankruptcy (t) Government Bonds