Today, Argentina made a final offer to creditors as part of its ongoing effort to restructure $ 65 billion in external debt.
According to the “German” offer presented by the Argentine government to the American Securities Commission, creditors will receive 53.5 US cents for every dollar of the value of their current dues, to be paid in full within one year, while the previous offer included payment over 3 years. The value of the offer is greater than the value that the International Monetary Fund believes that Argentina can meet.
This will remain in place until August 4.
“We are making a great effort to fulfill our word,” said Argentine President Alberto Fernandez, “the new proposal is” the greatest effort we can make. “
The Argentine government asserts that the current debt arrangements cannot be fulfilled.
It is noteworthy that Argentina, the second largest economy in South America, has not already paid 500 million dollars of debt despite the maturity of the payment last May. Failure to reach an agreement with creditors could lead to the bankruptcy of the Argentine state.
Argentine Economy Minister Martin Guzman said the government hoped that creditors would realize that “our means are limited.” Argentine creditors include investment firms such as Black Rock, Fidelity, Jerry Lock Capital and Ashmore.
Argentina has extended the deadline for debt structuring talks five times since the government of President Alberto Fernandez began negotiating with creditors several months ago.
The Argentine government says that any restructuring of the debt must be within the financial capabilities of the country to pay, in light of the deep financial crisis that it suffers even before the outbreak of the emerging Corona virus.
The inflation rate in Argentina is currently more than 50 percent, and the International Monetary Fund expects the contraction of the Argentine economy by 5.7 percent of GDP during the current year, while the poverty rate in the country reaches more than 35 percent of the total population.
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