Argentina’s 15 – year battle with holdout creditors may come to an end after the country’s lawmakers approved President Mauricio Macri’s loan repayment deal.
Argentina has found it hard to do business due to difficulties in accessing international credit caused by the years-long debt.
Argentina defaulted on a $100bn (£71bn) loan in 2001.
The deal approved is with creditors in New York
The Senate finally approved the repayment package after a heated debate that took 12 hours on Wednesday.
The president had earlier on warned the lawmakers that saying “no” would be equal to condemning Argentina to be a “financial pariah” in which they are shunned by the global credit markets. Argentina has been left with till 14th of April to make payment to the holdouts.
The countries neighboring Argentina are able to borrow at interest rates of about 5% whereas they pay at least double and this hampers their access to the help that is needed.
President Macri has won after the Wednesday “yes” vote because he is the one that struck the deal after he won his election in November. The debt crisis was a key issue in his presidential campaign to which he promised to tackle.
We can therefore say that Macri has done his “homework” just as he had promised and met one of his promises of clearing Argentina’s international name and putting it in a position where it can issue bond again.
The expensive part is remaining and that is payment of the country’s debts.
Macri’s promise is that they will start doing so from April 14th, in spite of reports that Argentina may consider delaying the start of the payment.
A majority of 165 to 86 lawmakers voted in favor of repealing two bills which stood in the way of the agreement with creditors.
The following debate in the Senate, where opposition parties have a majority, started on Wednesday, and was approved 54 votes to 16.