Argentina returns to default

Reading Time: < 1 minutes

The illusion of stability in Argentina has been shattered by a new debt default. The debt itself however is not new. It is the same debt that threw the country into turmoil 13 years ago in what was the biggest default ever seen.

By Gabriela Sanchez, Socialist Party

Argentina has been ordered by the US Supreme court to pay $1.3 billion to a minority of debt holders known as the “vulture fund investors”. These investors refused to be part of debt restructuring talks that took place after the last crisis. The “vulture fund investors” are in reality US hedge funds that purchased Argentinean debt cheaply after the economic crisis.

While the Kirchner government has said it cannot pay the debt, it has not yet put forward any real alternative to payment. Additionally the already worsening economic situation in the country suggests that a second devaluation is possible. This would have further impacts on the working class and poor.

Most Argentineans will remember well the first default which virtually wiped out the middle class. They will also remember the massive struggles and protests that ensured. While the impacts of this latest default are yet to be seen the need for mass organisation to fight for real alternatives outside the capitalist system are clear.

For more analysis see Argentina: Another debt default