Argentina Defaults on $3 Billion IMF Debt

[UpInArms]

http://asia.reuters.com/newsArticle.jhtml?type=worldNews&storyID=3416341

BUENOS AIRES, Argentina (Reuters) - Argentina defaulted on a $3 billion debt to the International Monetary Fund on Tuesday, a government source said, the biggest single missed payment in the IMF's history and one that is likely to further isolate the precarious economy.

The default, which comes nearly two years after Argentina racked up the biggest sovereign debt default ever in the throes of economic collapse, means Latin America's No.3 economy joins the ignominious ranks of IMF defaulters like Liberia, Sudan and Zimbabwe.

<snip>

Kirchner's new left-leaning government opposes IMF austerity plans and refused to use around a quarter of its international reserves to pay Tuesday's debt.

Thousands of unemployed protesters, including mothers pushing strollers and men waving placards such as "No to the IMF, Yes to education and bread!," paraded in downtown Buenos Aires, where people often label the IMF the "International Misery Fund."

Kirchner, part of a growing number of Latin American leaders reluctant to follow Washington- encouraged pro-market reforms, argues that he must place priority on helping around half the country of 36 million people that live in poverty.

...more...

[htuttle]

1. Hmm...wonder if someone needed that money to pay one of their own debts?

I seem to remember something about one hell of a debt pyramid involving a number of the countries in Latin America and huge multinational banks. I think this came out when Argentina was at risk of defaulting the last time, a few years ago.

At the time, I think it was considered 'VERY BAD' if Argentina were to default.

[mbperrin]

2. Good for them!

Bankrupting your country for the pleasure of some big busineses doen't make sense! If only about a hundred other countries would follow suit, we could make some inroads here!

[Don_G]

3. It's A Bad Sign

The financial relationship between nations is like lining up Dominos on end and seperated half-an-inch apart. When one is toppled, eventually they all do.

Pro-market reforms didn't work there because they couldn't afford to do it in the first place, had to borrow money from the US to support their government and the people had "spoken."

I wonder how many other nations there are that are about to go bankrupt on the political urging of ShrubCo?

[SharonAnn]

4. nd they were forced to privatize everything, water, electricity, etc.

so the price of water shot up tremendously, so did electricity, etc.

Few could afford to buy them.

[Wwagsthedog]

5. Didn't something like this start the depression 70+ years ago?

n/t

[Maple]

6. Germany defaulted

on it's war reparations debt.

[Dirk39]

7. with the little difference....

that germany started a world war before, while Argentia is just one of the victims of the more silent WW4. Please don't pay, Argentia! Throw them out of your country!
Hello from Germany,
Dirk

[Wwagsthedog]

8. Hi Dirk!

How is everything in Germany? Should I buy Euros?

wwtg

[Dirk39]

9. Buy Euros!

...and send them to Argentia. Germany is boring and beautifull. We're just about to finish "operation health-care-freedom". Then we go on with "operation employment-freedom". We have no time to liberate Argentinia or Iraq. But wait 'till we've finished to liberate ourselves... We're evil and we take no prisoners:-)
I can't wait to see America again, it's just a bit heavier than passing the Berlin Wall these days, but inside there are so many wonderfull people:-)
Dirk

[dfong63]

10. BFEE fingerprints at the scene of the crime

according to Greg Palast's book, "the best democracy money can buy".

excerpt from ch 3, "California reamin'":

``...
Resistance was futile. The IMF and World Bank made the sale of electricity, water, telephone and gas systems a condition of loans to every developing nation. Since a loan cutoff meant economic death, it was sell or die. ...

Argentina was the first to offer up booty, beginning with the 1988 sale of a trans-Andean gas pipeline. The minister for public works at the time, now Senator Rodolfo Terragno, told me that in the fall of 1988 he received a strange telephone call in Buenos Aires from America from someone who identified himself as the "son of the vice president." But *which* Bush? Terragno knew it wasn't Neil Bush, an acquaintance and big-time investor in Argentina; it had to be George W. (Terragno's assumption), or, my industry sources tell me, Brother Jeb. Whichever, the son of a Bush told the minister that giving the project to a newly formed company called Enron would "strengthen ties between the U.S. and Argentina."

Coming from a son of the man about to enter the White House, this was not a light-handed pitch. ...

In 2002, when I met with the Argentine, Terragno provided me a clue to the motive for the Bush boys' tongue-tied response. Enron, he said, wanted a giveaway --- the Texans would pay only one-fifth the world price for Argentina's natural gas, ridiculously below other bids. Enron's local lobbyist, said Terragno, indicated that if the Argentine minister greased the lowball Enron bid, the company would have shown its gratitude. ... Terragno turned down Enron with a laugh --- but then called for investigation two years later when a close friend of the Bush family, Argentina's President Carlos Menem, stepped in to give Enron another natural gas pipeline on sweetheart terms. (A government inquiry was launched, then died when Menem fired the chief investigator.)

Enron culminated its Argentine shopping spree with the purchase of the water system of Buenos Aires province. It got the full Enron treatment: Workers were fired en masse, allowing Enron to pocket their pay, in violation of the company's solemn promises to invest. Without maintenance workers, water mains were left broken. Enron's profitable neglect of the system left water contaminated. ....
...''

[JNelson6563]

11. Palast's book, my first thought

time for the ol' IMF riot.

Julie

[dudeness]

12. the gravy train moves on

australia and the US are negotiating a free trade agreement..so I can farewell any publicly owned assets..does McDonalds do public transport??

[GreenGreenLimaBean]

13. Shows what a miserable Press we have.

I read the entire Austin-Statesman yesterday and today, and not 1
word on this story. Methinks this is going to be big...Caught Paul
Krugman with the Russert whore over the weekend, he is outright saying
we are headed for insolvency....and I believe triggers like this
could start the collapse.