Argentina to borrow cash, 15 years after default

Published 18.04.2016 00:00

Argentina seeks to end 15 years of financial isolation on Monday when it sets out to borrow cash on international credit markets for the first time since a 2001 default. The country is looking to boost its struggling economy and settle a 15-year lawsuit by United States investment funds, which former Argentinian President Cristina Kirchner branded "vultures."

This week's debt issue "is an important, epoch-changing event," said Gaspard Estrada, a specialist at French Latin American affairs observatory OPALC. "It serves partly to pay the vulture funds, to finalize an agreement with the remaining creditors and to give the government room to maneuver to restart the country's economy."

Economist Marina Del Poggetto warned, however, that the country will also have to lower its public deficit and strengthen the economy. "In the long-term, it will have to correct imbalances because going into debt is not a strategy in itself," Del Poggetto said. Now that a U.S. court has cleared the way for Argentina to start borrowing again, the government plans to issue up to $15 billion in bonds on Monday and Tuesday. The court ruling was seen as a victory for Conservative President Mauricio Macri. He has been scrapping Kirchner's protectionist policies and opening up Argentina's diplomatic and financial ties. He has lifted currency controls and raised utility prices, generating angry protests by Argentines who say their spending power is declining.

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