El Cronista
Vulture funds: Argentina ratifies its position
Wednesday, March 19, 2014
Cabinet Chief Jorge Capitanich yesterday ratified that “Argentina is maintaining its position” in the courts of the United States in the dispute with the vulture funds.
Capitanich insisted that Argentina is holding to its posture of arguing the principle of sovereign immunity in the litigation with the holdouts in the courts of the United States and thereby continues to reject the rulings from lower court judges.
“For the moment, Argentina is maintaining its clear position with respect to the recognition of the principle of sovereign immunity and on what we warned in the courts about the interpretation of the pari passu clause (equal treatment of creditors),” said Capitanich to the press in the Economy Ministry.
The Cabinet Chief added that as a consequence, “we understand that (the interpretation) is incorrect on the part of the courts of New York.”
He added that “the Argentine position is that we have put forth a sovereign debt restructuring in the framework of what the Constitution says and in virtue of that, we maintain our position.”
Argentina hopes that the U.S. Supreme Court will accept review of the lower court rulings that order the country to pay US$1.3 billion to holdouts.
Capitanich spoke with journalists accredited by the Palacio de Hacienda after participating in an event in which he signed a price agreement for construction materials with the province of Formosa, and on vacant lots with Chaco.
“Ninety-three percent of the public debt is duly normalized, 7% is in a condition of non-compliance for multiple reasons. There is a part that is in litigation in the New York courts and now in the phase of likely acceptance from the U.S. Supreme Court,” Capitanich recalled when asked by the press about Argentina’s position before the claims of the holdouts.
Telam
The government will maintain its posture in the lawsuits with the vulture funds
Wednesday, March 19, 2014
Cabinet Chief Jorge Capitanich confirmed that “Argentina maintains its position” before the U.S> courts in the dispute it has with vulture funds.
“Ninety-three percent of the public debt is duly normalized, 7% is in a condition of non-compliance for multiple reasons. There is a part that is in litigation in the New York courts and now in the phase of likely acceptance from the U.S. Supreme Court,” Capitanich recalled when asked by the press about Argentina’s position before the claims of the holdouts.
After the meeting in which he signed an agreement with vacant lots from the province of Chaco under the framework of “Precios Cuidados” (cared-for prices), the Cabinet Chief highlighted that “for the moment, Argentina is maintaining its clear position with respect to the recognition of the principle of sovereign immunity and on what we warned in the courts about the interpretation of the pari passu clause,” known as “equal treatment” among those that entered the debt swaps and those that did not.
"We understand that (the interpretation of pari passu) is incorrect on the part of the courts of New York. As a consequence of that, the Argentine position is that we have put forth a sovereign debt restructuring in the framework of what the Constitution says and in virtue of that, we maintain our position,” he emphasized.
El Cronista
A proposal for the Paris Club: swap of debt for technology
Wednesday, March 19, 2014
by Pablo Monat, Businessman and university professor
The government has initiated a new outreach to the Debtors Club grouped in the Paris Club to normalize the payment of debt that Argentina has with its members and that is in default since 2001 (some US$10 billion between principal and interest owed and/or penalties).
I understand that an imaginative structure for a form of payment could be used as a catalyst for advanced innovative technology. Despite government efforts and those of certain national companies that promote innovation through investments in R&D, the country is far from being an innovator on the point of new technologies, except for notable exceptions.
The proposal is to make what financiers call a ‘debt to equity’ swap, which means converting a small part of the debt (we’d say 2%, or US$200 million) in capital whose holders will be Argentina’s creditor governments (mostly Germany, Japan, the U.S., Holland and Spain). This US$200 million would be destined to form 10 venture capital funds (US$20 million each) co-managed by risk-capital funds with international trajectory together with national risk capitalists that will co-invest in “start-ups” and Argentine tech companies with global projection.
The proposal aims to remedy two 'strategic failures' in the national innovation system. The first, the lack of creation of companies designed to be global ('born global'). This is despite the high Argentine propensity to create new companies (which in financial jargon are called 'start-ups') which places Argentina at the top of entrepreneurship. But few or none of them are designed or intended to be global players, which Endeavor, a foundation dedicated to promote entrepreneurship, calls 'high-impact entrepreneurs'. This part of the swapped debt will go towards collaboration between Argentine and foreign universities, creating training programs for entrepreneurs who acquire the knowledge, skills and contacts to navigate the waters of the global technological ocean.
The second failure corresponds to the meager size of the Argentine venture capital industry. Although local data is scarce, according to an article at the end of last year in the weekly magazine Apertura, Silvia Torres Carbonell, Executive Director of the Center for Entrepreneurship from IAE and an academic in that think tank, points out that the funds available in Argentina total US$60 million from three venture capital firms. This contrasts, says Torres Carbonell, with, for example, "the VC market in Chile comprising 21 funds, which together have US$410 million in capital." That in an economy whose GDP is little more than half of Argentina’s, which shows our relative backwardness in the area.
These numbers pale in comparison to the world leader in VC investment – the United States, where venture capital investments according to the National Venture Capital Association totaled the extraordinary number of US$ 20 billion in 2013 alone. In that country, the names of companies that were started with a VC contribution (generally modest) are astonishing. Giants in the field of semiconductors such as Intel or Cisco, signatures hardware makers such as Apple, of software and internet like Microsoft, Oracle, Google, Ebay and Facebook, or firms that innovated the way of doing things in business such as Federal Express or Starbucks. The list continues, and VC continues to venture into new technologies such as biotechnology, renewable energy, or the promising nanotechnology.
Faced with the growing interdependence of global innovation technological systems, the importance of developing an entrepreneurial ecosystem of high global quality is obvious. This together with a venture capital sector agreeing to accompany its growth through financing. Both are strategic sectors for quality economic growth, and for transforming Argentina into an innovative economy, and one that is inserted into the creation of scientific knowledge that is applied to global technology companies. A creative negotiation with the Paris Club allows us to think that this can become a reality.
Clarin
A difficult time for a walking trip
Wednesday, March 19, 2014
by Eduardo Van Der Kooy
Cristina Fernández wasn’t fortunate when she chose this moment to leave her isolation and show herself again, after a long time, before the world. She had to listen from the mouth of Francis the recurring references to the need for social inclusion. According to the Pope’s thinking, that problem is directly linked to crime, drug trafficking and the unemployment of millions of young people. The President couldn’t make a fuss, therefore, about the presumed benefits of the economic model that are part of her domestic narrative.
She could only listen and share.
Cristina will meet today in Paris with French President Francois Hollande. The Socialist leader is going through a period of low popularity, worsened by economic problems and his indiscreet amorous foibles. The President will have a hard time, as she has in other occasions in which she cast her shadow over Planet Earth, to now give lectures about how to combine growth with inclusion. Growth is a thing of the past, inclusion only seen in the reports from INDEC and, out of necessity, the government started to straighten out the inflation rate that has been hidden since 2007. In reality, it has only been straightened out for two months.
In 60 days it has accumulated 7%. A bad omen for the year.
The rest has been shelved for now.
There will be no flourish of numbers in front of Hollande.
That contact with the French leader is needed for other reasons. The model is treading water and the government has to carry out some duties for some coins to drop down from the financial markets into its hands in the future. To settle the debt with the Paris Club (US$6 billion) is one of those obligations. First it was the agreement was made with Repsol for the expropriation of YPF. The normalization of political ties with the IMF are moving lukewarmly forward. The biggest tangle is with the holdouts that didn’t enter the debt swap and are suing in New York courts. France has been the only country from the group of the powerful to stand in solidarity with Argentina’s position in that dispute.
Cristina doesn’t have Hollande’s personal problems affecting her public image.
Her image is being defiled by very dark matters from the administration of power. Amadou Boudou is under judicial siege over the Ciccone scandal. And influence peddling has gathered steam in the judicial branch from another one of her key lieutenants: Carlos Zannini, the Legal and Technical secretary. For the moment, only Maximo Kirchner seems unharmed. But her son, who also has sowed small conflicts with justice, is not an official.
The system of presidential power will being check-mated by suspicions of corruption.
With those calling cards, Cristina went on tour to the Vatican and Paris.
Some time ago, the President presumed that something could happen with her Vice President.
"What you put in you’re going to have to take out,” , you are going to have to take", said a man close to the case of the Ciccone scandal over the weekend. Judge Ariel Lijo piled up evidence against Boudou. The Ciccone family, through a paid ad, piled on with extreme harshness against the guitarist and former member of the UCeDe. They blamed him for having wanted to take over of the company which, among several projects, was devoted to printing currency notes. The weakened legal and political status of Boudou has induced the President to impose K-Radical Gerardo Zamora as the President pro-tem of the Senate. The first in the line of succession after the questioned VP. The Senator and former Governor of Santiago del Estero is an economic and political hostage of Cristinism.
The bullets started whistling around Zannini since last week. For what reason? His right hand man in the Legal and Technical Secretariat, Carlos Liuzzi, was embroiled in the matter by a statement from Norberto Oyarbide. The judge said, with a very relaxed body, that in December he ordered a suspension on a raid of a financier, after a telephone request by Liuzzi.
The official warned that police were asking for bribes, on behalf of the judge, to put an end to the operation. Oyarbide said that warning deserved to be confidential.
That confidentiality will start to be explained once Prosecutor Patricio Evers asked yesterday to reopen an inquiry filed by Oyarbide over alleged illicit enrichment by the aforementioned Liuzzi. They say that his personal wealth grew by 38 times between 2003 and 2011. They must investigate, in addition, if it also increased between 2011 and 2013. That call from Liuzzi to Oyarbide, apparently, was far from constituting a circumstantial fact.
Cristina, as she did in her time with Boudou, also ordered there be public and unrestricted support for Zannini.
It went to the Secretary of the Presidency, Oscar Parrilli. He said that the de-facto number two in the government has total confidence. The confidence of who,? Perhaps neither Julián Alvarez nor Deputy Eduardo De Pedro would feel the same way. Last week, they were scrambling over a petition for an order of impeachment against Oyarbide, set off from different fronts, and it was postponed at the Judicial Council. Both camporistas were only recently named as members of the body.
The dilemma must start to be resolved tomorrow. The Committee on Discipline and Prosecution of the Council will address Oyarbide case.
That Committee is controlled by Kirchnerist Carlos Moreno.
The counsellor argued the previous week that the accusation could not be taken up without the judge being notified. That failure had allowed Oyarbide to argue for the procedure to be nullified. It remains to be seen how Moreno will conduct himself in the coming hours.
La Campora, however, one month beyond the destination of this new scandal, is feeling uncomfortable from the situation. It has to protect Oyarbide at the same time that a member of its intellectual vanguard - Ricardo Forster, of Carta Abierta - described him as a "lousy" judge. It is not the first time that the camporistas have reproached Zannini over incompetence in his judicial whitewashing. And this whitewash is not just any one: it's Oyarbide, who feeds his history with a scorecard of petitions for political trials of which only one actually happened, in the 1990s, although it ended in acquittal.
Oyarbide, with a description of what happened in that aborted raid, unmasked K-interference in the judiciary like few have. Did he it to send a message to those in power? Will those in power be encouraged to send him definitively to the slaughterhouse? It depends only on what Cristina decides when she forgets Paris and lands back in Buenos Aires.
El Cronista
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