http://www.counterpunch.org/2014/06/27/destabiliziation-in-latin-america/

Destabiliziation in Latin America
June 27, 2014

ZunZuneo and the U.S. Policy
Destabiliziation in Latin America
by Matt Peppe

News from the AP about the U.S. government’s secret project to create a Cuban Twitter or “ZunZuneo,” to be used for disseminating propaganda and fomenting unrest in Cuba, spurring young people in that country to overthrow their government, comes as no surprise to anyone with even the most cursory understanding of U.S. policy in Cuba and Latin America in general. It is but a tiny part of a 55-year-old, completely unprovoked, genocidal policy against a nation whose only offense is failing to subordinate itself to the will of the U.S. government.

ZunZuneo was initiated and run by the ostensibly “humanitarian” U.S. Agency for International Development through a series of shell corporations which were not supposed to be traced back to the government. The project is typical of the type of subversion and interference with another nation that the U.S. government has always felt entitled to undertake, regardless of the principles of sovereignty and self-determination fundamental to international law.

Due to Cuba’s successful revolution in 1959 and their ongoing ability to resist U.S. subversion of their socioeconomic system, U.S. actions against the tiny nation in the Carribean have been harsher than any other victim who fails to recognize the U.S. as its rightful master. Early destabilization efforts included a vicious campaign of terrorism against Cuba, part of a massive CIA effort that later evolved into a policy of providing safe haven to terrorist exile groups and looking the other way as they violate the U.S. Neutrality Act and international law.

The largest act of subversion is, of course, the blockade, euphemistically known in the U.S. as an “embargo.” The U.S. blockade against Cuba has now lasted more than a half century as a punishment for Cuba achieving self-determination. The blockade is an act of warfare, as it is based on the Trading with the Enemy Act of 1917 (TWEA), which is only applicable during times of war. The blockade has been expanded and strengthened over the years with various violations of international law such as the Helms-Burton Act and the Torricelli Act. The policy of the U.S. blockade has been found to be an illegal violation of international law for 22 straight years by 99% of the world’s nations, who have demanded its end.

The attempted subversion of a country’s political system is not unique to U.S. actions against Cuba, nor is it unique to USAID. Other U.S. government agencies, such as the National Endowment for Democracy (NED), have long carried out similar actions. Such organizations purport to be apolitical groups for “democratic” promotion but are in reality nothing more than fronts, essentially political action committees (PACs). Due to the concealment of their purpose, they are more like political slush funds used to advanced the perceived interest of the United States.

Of course, they are not used to promote American “values” or “humanitarian principles” with abstract names like “freedom” and “democracy”, but the interests of the corporate sector eager to seek new investment opportunities outside their own country and control over the resources that they refuse to recognize as the property of local populations.

For example, over the last 15 years in Venezuela the U.S. spent $90 million funding opposition groups, including $5 million in the current federal budget. During this time, since Hugo Chavez first assumed office, his revolutionary party has won 18 elections and lost only 1. The margins of victory during Chavez’s tenure reached higher than 20%. After his death, his hand-picked successor Nicolás Maduro won by a margin of 1.6% in 2012. This is a very narrow margin, to be sure, but as Dan Kovalik points out it is a margin of victory larger than JFK’s victory over Richard Nixon and certainly larger than George Bush’s victory over Al Gore. Bush actually lost the popular vote but was declared the winner by the Supreme Court in an instance of political mettling that would be hard to imagine in any other democracy in the world.

Despite the success of the Chavista party, the opposition, aided and abetted by the U.S. government, has tried to portray the elections as “questionable” or “illegitimate”. Secretary of State John Kerry led the way by calling for a recount, encouraging the opposition to challenge the results of the election and refuse to concede.

“Washington’s efforts to de-legitimise the election mark a significant escalation of US efforts at regime change in Venezuela,” wrote Mark Weisbrot. “Not since its involvement in the 2002 military coup has the US government done this much to promote open conflict in Venezuela… It amounted to telling the government of Venezuela what was necessary to make their elections legitimate.”

In fact, international organizations monitoring the Venezuelan Presidential vote attested to the “fair and transparent” election process and former President Jimmy Carter called the country’s electoral system “the best in the world.”

The U.S. government has also refused to recognize the vast advances social progress made under the current government. Under Chavez, the country drastically reduced poverty, especially extreme poverty, with the latter falling from 23.4% in 1999 to 8.5% in 2011. As the government has put its massive revenues from oil sales to use to provide universal education and health care for all Venezuela’s citizens, people traditionally shut out of the country’s economic gains have benefited tremendously. Venezuela has gone from one of the highest rates of income inequality in Latin America to the lowest, a truly Herculean accomplishment.

Yet this does not even factor into the U.S.’s policy toward Venezuela. As a cable published by Wikileaks from 2006 demonstrates, the U.S. policy of destabilization and regime change against Hugo Chavez was pursued until his death. Now, with the perceived weakness of Maduro and the propaganda value of violent street protests portrayed in the international media as a “student movement”, it seems that Kerry is like a shark who smells blood in the water when he slanderously proclaims a “terror campaign” and foments further unrest.

U.S. government officials must feel frustrated at their inability to project their will for Venezuela to be subservient to the United States. After all, it has proved much easier in countries such as Honduras to oust a democratically elected President as happened with Manuel Zelaya.

“Zelaya was initiating such dangerous measures as a rise in minimum wage in a country where 60 percent live in poverty. He had to go,” wrote Noam Chomsky, who goes on to note that the U.S. virtually alone in the world in recognizing the “elections” later held under military rule of Pepe Lobo. “The endorsement also preserved the use of Honduras’ Palmerola air base, increasingly valuable as the U.S. military is being driven out of most of Latin America.”

Unsurprisingly, four years after the coup a Center for Economic and Policy Research report finds that “much of the economic and social progress experienced from 2006 – 2009 has been reversed in the years since,” with “economic inequality in Honduras” rising “dramatically.”

The next success of Obama’s administration in Latin America was the coup in Paraguay, in which the right-wing, elite opposition was able to drive democratically-elected Fernando Lugo from the Presidency and thus stop his program of promoting land rights for a long-oppressed peasant population.

“The United States promotes the interests of the wealthy of these mostly-poor countries, and in turn, these elite-run countries are obedient to the pro-corporate foreign policy of the United States,” writes Shamus Cooke.

There was also the coup last year against the progressive former mayor of Bogotá, Colombia, Gustavo Petro. His supposed abuse of power was de-privatizing garbage collection in the capital city, which allegedly harmed the “freedom of free enterprise.” The anti-democratic actions in Colombia, a beneficiary of an enormous amount of U.S. aid, have not affected the U.S. policy toward the nation. Kovalik notes that the actions taken against Petro are part of a much larger pattern.

“While the press, as well as the U.S. government, will not acknowledge it, the elimination of progressive political leaders by coup d’ état is taking place in Latin America with increasing frequency,” Kovalik writes.
Of course this is part of long-standing U.S. policy that has destroyed democracies in countries such as Guatemala, Chile, Brazil, Argentina and many other nations since the end of WWII alone. The anti-democratic measures enabled and supported by the U.S. have taken decades to recover from, if the nations victimized have been able to recover at all.

Media reporting of the story has tended to downplay or apologize for the Cuban Twitter program by stressing the U.S. government denials that it was meant to overthrow the government, or it was beneficial in allowing Cubans to communicate with each other.

Not surprisingly, Cubans themselves do not see it this way. They understandably do not appreciate an underhanded attempt to collect their personal data or to use them as pawns in a political game.

This should be a reasonable position for any American to understand. Would you support China or Russia setting up a social network meant to overthrow your government to impose one more to their liking?

Certainly not. The plot in the fictitious House of Cards of infiltration of the U.S. political process by foreign money probably seems shocking to the average American. In this country, it is a crime for foreign countries or nationals to influence democracy and domestic affairs through political contributions.In reality, this is exactly what the U.S. government has carried out in foreign countries for decades. ZunZuneo is demonstrable proof they continue to do so to this day. ZunZuneo is not just a case of USAID and the U.S. government getting caught with their hand in the cookie jar. It is part of an ongoing assault against sovereignty and self-determination of any country who opposes U.S. foreign policy. People of these countries are just as smart, capable, and deserving of a government independent of outside interference as U.S. citizens are.By simply recognizing that their government has no business in determining another country’s political affairs, and demanding that their government stop spending their tax dollars to do so, U.S. citizens could do more to advance democracy and the ideals their country claims to stand for than the U.S. government has ever done.

Matt Peppe holds a master’s degree in Public Administration from the Rockefeller College of Public Affairs and Policy at SUNY Albany and a bachelor’s degree in English and American Literature from NYU. His writing about U.S. foreign policy and Latin America has appeared in Countercurrents, La Respuesta Magazine and other outlets. You can read his blog or follow him on twitter.

http://www.counterpunch.org/2014/06/27/destabiliziation-in-latin-america/

HAVANA, Cuba, Jun 28 (acn) Cuban hero Fernando Gonzalez, who was recently released from a US Federal prison, said in Havana that he will keep on the struggle for the freedom of three of his compatriots still imprisoned in the United States.

Speaking on Cuban television, Gonzalez, who was recently appointed vice-president of the Cuban Friendship Institute (ICAP), thanked the support by the people of Cuba of the cause of the Cuban Five, as Rene Gonzalez, Gerardo Hernandez, Ramon Labanino, Antonio Guerrero and himself are known around the world.

The five Cubans were arrested and imprisoned in 1998, and later given unfair prison sentences by a biased Miami court after they infiltrated ultra-right organizations that planned terrorist actions against Cuba.

Fernando and Rene Gonzalez were two of the Five who, after meeting their sentences returned to Cuba.

The other three remain incarcerated in US prisons despite huge international claim for their release.

As to his recent appointment at the ICAP, Fernando Gonzalez said that it is an honor to assume such a responsibility at an institution that has maintained the struggle for the release of the Five for so many years now.

Gonzalez said that his main task will consist in acting for the release of his three brothers incarcerated in the US and he called for the continuation and strengthening of the struggle for that cause.

I will always remember Ms. Steward as a brave, outstanding leader and fighter for working people. She did not hesitate to get right in the middle of many fights against powerful forces feeding off the labor of working people here and around the world. She was an internationalist who understood that injustice against workers in other countries is used to oppress workers in this country. She fought tirelessly against racial and economic injustice and stood up for the voiceless.

She joined several of us when we went to Austin with the AFL-CIO to fight for health care and was a powerful presence at countless rallies and protests, including rallies against the Iraq war and for Justice for janitors.

She loved art and history. Although she had a special interest in African-American art and history, she was very knowledgeable of art from many countries and taught me a great deal about these subjects. She was outraged by the effort of some individuals to destroy historically important art on the TSU campus. She was instrumental in getting me involved in opposing these actions. I am happy to say that the public outcry stopped the destruction in its tracks.

She loved the University Museum and worked hard to make it an international showcase for African-American art. She was saddened by the fact that our culture teaches people to strive for individual achievement without consideration of the common good. She was a rare individual in that she understood the importance of the common good. The University Museum has been and continues to be a battleground in the struggle for the common good.

She loved education and was working on a Masters degree in history at TSU at the time of her death. She was very close to achieving the Masters degree and I hope the University will grant that degree posthumously.

She loved music as well. She loved African music, blues and country music (which are the only indigenous music forms in the United States), Latino music, jazz and many other music forms. She had a wonderful voice herself and was related to Mahalia Jackson.

She loved the theater, movies and was trained in drama. She enjoyed attending performances at the Ensemble Theater and attending Tyler Perry movies.

She loved her mother, sisters and family. She was especially appreciative of her sister Faye. In her last days, over the phone, she told me “she is such a good sister.”

She believed in the benefits of a healthy lifestyle and believed in the curative powers of a healthy diet. She was skeptical about the profit driven health care system in this country. She was fearful that doctors choose treatment based on the money they would make rather than the benefit to the patient.

She understood the importance of peace and opposed war.

She was a union member and fought for better wages for herself and her coworkers against powerful forces opposing the progress of working people.

She was an environmentalist and believed in recycling. She fought for a recycling program in her neighborhood. She stressed the importance of recycling “everything.”

She understood the importance of political struggle. She worked tirelessly to register students and staff on the TSU campus to vote. She worked in the Obama campaign as I did and went with me to view the inauguration from the Seafarers’ union hall. I never believed that I would live long enough to see an African-American president of the United States. I never believed I would live long enough to hear Pete Seeger sing This Land Is Your Land at a presidential inauguration. Both of those things happened in 2008 and they gave me great joy.

She opposed injustice everywhere and was particularly concerned about the injustice to African-American people. She was opposed to the US injustice against Cuba and many other countries. She admired Che Guevara, Fidel Castro, the Cuban five, Hugo Chavez, Nelson Mandela and many others. When we hosted the art exhibit of Antonio Guerrero, one of the Cuban five, in Houston, she directed the hanging of the art and displayed her skill at organizing an art exhibit. She made me appreciate the difficult task of hanging art since she told me what to do and I did it and as a result, the exhibit was a great success. She told me that she had learned a lot about hanging art from Dr. Wardlaw.

I would like to conclude with a few readings. Two of them were quotes that I found in her desk that I know she liked. The others are two quotes that I hope she would have liked.

The first one is “I’m not giving my black back.”

“I’m not giving my black back! I’m not giving up my greens or my grits or saying ‘girl’ and putting my hands on my hips. You see… Life for me ain’t been no crystal stair and I’m not giving up Rosa Parks, Fannie Lou Hamer, Mary MacLeod Bethune, Sojourner Truth, Mdm. C. J. Walker, Toni Morrison or Dr. Maya Angelou, ‘cause you see, I am a phenomenal woman and I’m not giving my black back.

I’m not giving up my crown, waves, braids, curls, locks, kinks, scarves or Muslim garb. I’m not giving up sitting in Ma’s kitchen eating peach cobbler or sweet potato pie and hearing her ask me, ‘How you doing baby?’

I’m not giving up going to ‘You Buy, We Fry’ on Fridays, or barbecues on Saturday playing bid whist, spades and slammin’ those dominoes. I’m not given back Harriet Tubman’s train, Soul Train, Coltrane or the midnight train to Georgia. Now, you can meet me at the function at the junction but I still won’t give up B.B. King, the Whispers, Fancy Ms. Nancy, Lena Horne, the Philadelphia Sound, Motown or the temptations.

Cause you see, it’s the way we do the things we do, like building the pyramids that still stand made by our forefathers hands where the diamonds, oil, silver and gold are buried in our rich dark land.

I’m not giving my black back! I’m happy being happy with my wide hips and my wide nose and the rich melanin in my skin. I love putting lotion on my ashy legs.

Oh, I’m happy being nappy and being in the skin that I’m in. I won’t deny or forget my ancestors who lay in a wet grave at the bottom of the sea in the Middle Passage from slave trade.

And I won’t give up on our youth of today who still need a way made. I won’t give back Miles even though he didn’t smile. I won’t give back Marvin Gaye, Richard Pryor, Phyllis Hyman, Billie Holiday or Billy Eckstein, Jackie Robinson or Jackie Wilson.

I won’t give back the electric slide, Alvin Ailey, Bojangles or Debbie Allen. You think I’d give up reading my Jet, Ebony, Essence, Emerge, Black Enterprise, Heart and Soul or Upscale magazines? For we are a colorful people.

Like Curtis Mayfield sang, we are people that are ‘darker than blue.’ We are honey, cinnamon, mahogany and chocolate. We are REDD Foxx, James BROWN, Barry WHITE, The Mothers of the Church dressed in WHITE, The Color PURPLE, the Lady Who Sings the BLUES and we are Al GREEN with love and happiness. Oh, NO…I’m not giving my black back!

I’m not giving back Maxine (Waters), Martin, Medgar, Malcolm, Mandela, Marley, Marcus, Mohammed Ali, Michael (Jordan) or the Million Man March. I’m not giving my black back.

Join me in lifting up the black woman’s spirit.”

The second reading is a quote from Frederick Douglass.

September 25, 1883. “Though the colored man is no longer subject to barter and sale, he is surrounded by an adverse settlement which fetters all his movements.

In his downward course he meets with no resistance, but his course upward is resented and resisted at every step of his progress.

If he comes in ignorance, rags and wretchedness he conforms to the popular belief of his character, and in that character he is welcome; but if he shall, as a gentleman, a scholar and a statesman, he is hailed as a contradiction to the national faith concerning his race, and his coming is resented as impudence.”

The third is from a book by Angela Davis “Women, Culture and Politics.” This was written in 1984 from the section “On Women in the Pursuit of Equality and Peace” and the chapter “Peace Is a Sisters’ Issue Too: Afro American Women and The Campaign against Nuclear Arms”

“These are times of great suffering for black people. When we consider that the assaults on the
rights and lives of Afro-Americans have been menacingly complemented by the proliferation of sexist discrimination and by concerted attacks on workers of all races and nationalities, we find that we are not alone in our experience of social affliction. We furthermore share with every human being on this planet the historically unprecedented peril of nuclear omnicide. As black people, as women, as black women, we need to develop a more serious appreciation of the peace movement and the hope it alone is capable of generating for the future of our children. It is imperative that we reevaluate our failure to participate in the peace movement in numbers that are commensurate with our peace sentiments, and that we hastened to rectify this situation.

We can no longer afford to assume that peace is a white folks’ issue. How can we in good conscience separate ourselves from the fight for peace when nuclear bombs do not know how to engage in racial discrimination? And if it were at all conceivable that nuclear fallout could be programmed to kill some of us while sparing others, I can guarantee you that the war makers in this country would see to it that black people would be its first victims. What would be accomplished by victory in our struggles against racism, what purpose would be served by assisting our sisters and brothers in South Africa to overthrow Botha’s apartheid regime, when, in the final analysis, we might all be annihilated in a nuclear conflagration? Peace, my sisters and brothers, is a black folks’ issue and it is a black women’s issue. The failure to realize this might well cost us our lives.

Our history as Afro-Americans should render us especially sensitive to peace issues, for since the days of the African slave trade, we have been subjected to warlike aggression by a white ruling class in its quest for profit and power. More than anyone else, we should also understand that peace is not an abstract state of affairs, but rather is inextricably connected with our ability to achieve racial, sexual and economic justice. When we speak of peace, we must also speak of freedom.”

The next reading is from an article by Henry Winston “From the Anti-Slavery to the Anti-Monopoly Strategy.” Henry Winston was an African-American leader who fought against racism and was a labor organizer during the Great Depression and afterwards. He was incarcerated during the McCarthy era and lost his eyesight while in prison. “Frederick Douglas and Paul Robeson. In our time, the towering figure of Paul Robeson has personified the link between two significant periods–from the betrayal of Reconstruction to the new era of black liberation began with Martin Luther King and the civil rights decade.

Frederick Douglass had himself been a slave and Robeson is the son of a slave. Like Douglas and his time, Robeson has devoted his life to the cause of black liberation. And, like Douglas, he recognizes that black liberation cannot be achieved via a separatist path, but through black power in alliance with the oppressed and exploited of all colors. Robeson has always seen black independents and black-white alliance as related, indispensable components of the liberation struggle.

The principles that should “dictate policy,” Robeson has declared, are the following: “dedication to the Negro people’s welfare is one side of the coin; the other side is independence. Effective Negro leadership must rely upon and be responsive to know other control than the will of the people. We have allies-important allies-among our white fellow citizens, and we must seek to draw them close to us and to gain many more. But the Negro people’s movement must be led by Negroes, not only in terms of title and position but in reality.

Robeson struggles for self union of his people at home, and for solidarity with the oppressed and their allies at home and abroad. Whereas Douglas traveled widely in Europe to win support for the anti-slavery cause, Robeson traveled even more extensively, rallying support for black liberation and championing liberation from imperialism everywhere.”

So, in conclusion, we will all miss Ms. Steward and will never forget her. Let us remember Joe Hill’s words before his execution in 1915 “don’t mourn, organize!”

The Chicago Chapter of Jobs with Justice has endorsed HR 676, national
single payer legislation sponsored by Congressman John Conyers of
Michigan. HR 676 is also called “Expanded and Improved Medicare for All.”

Susan Hurley, Executive Director of Chicago Jobs with Justice, commented
on the resolution, “Single payer health care has to be our ultimate goal
in the United States. It is the only humane and civilized choice, as well
as being the best choice for health outcomes and cost.”

“The longer the delay, the deeper our shame in the eyes of the world and
future generations,” Hurley stated.

The resolution notes that an estimated 31 million Americans will remain
uninsured in 2023 and that underinsurance is growing as many patients are
forced into insurance plans with high-deductibles
(> $1,000) and narrow networks of providers.

Chicago Jobs with Justice, a broad coalition of scores of unions and other
organizations including the Chicago Federation of Labor, is dedicated to
promoting workers’ rights and social and economic justice.

HR 676 would institute a single payer health care system by expanding a
greatly improved Medicare to everyone residing in the U. S. Patients will
choose their own physicians and hospitals.

HR 676 would cover every person for all necessary medical care including
prescription drugs, hospital, surgical, outpatient services, primary and
preventive care, emergency services, dental (including oral surgery,
periodontics, endodontics), mental health, home health, physical therapy,
rehabilitation (including for substance abuse), vision care and
correction, hearing services including hearing aids, chiropractic, durable
medical equipment, palliative care, podiatric care, and long term care.

HR 676 ends deductibles and co-payments. HR 676 would save hundreds of
billions annually by eliminating the high overhead and profits of the
private health insurance industry and HMOs.

In the current Congress, HR 676 has 58 co-sponsors in addition to
Congressman Conyers.

HR 676 has been endorsed by 614 union organizations including 147 Central
Labor Councils/Area Labor Federations and 44 state AFL-CIO’s (KY, PA, CT,
OH, DE, ND, WA, SC, WY, VT, FL, WI, WV, SD, NC, MO, MN, ME, AR, MD-DC, TX,
IA, AZ, TN, OR, GA, OK, KS, CO, IN, AL, CA, AK, MI, MT, NE, NJ, NY, NV,
MA, RI, NH, ID & NM).

For further information, a list of union endorsers, or a sample
endorsement resolution, contact:

Kay Tillow
All Unions Committee for Single Payer Health Care–HR 676
c/o Nurses Professional Organization (NPO)
1169 Eastern Parkway, Suite 2218
Louisville, KY 40217
(502) 636 1551

Email: nursenpo@aol.com
http://unionsforsinglepayer.org
6/23/14

The Shame of Iraq
– from Zoltan Zigedy is available at:
http://zzs-blg.blogspot.com/

The close of the Second World War saw the rise of Arab nationalism, a movement that promised to unite much of the Middle East around independence and social advancement. The imposition of a Jewish theocratic state in the midst of Arab homelands no doubt accelerated this movement, as did later imperialist meddling such as the Suez intervention of 1956.

Both Nasserism and the Ba’ath Party were early vehicles of a growing nationalism centered on an Arab identity. Nasser’s engagement with non-alignment in the Cold War, his secularism, his advocacy of land reform and Egyptian socialism resonated with the Arab masses. Similarly, the pan-Arab Ba’ath Party organized around unity, independence, and socialism– all with a decidedly secular tone. Islam, rather than the basis for identity, was second to ethic national identities that proudly offered Islam to the world as a gift from the Middle Eastern peoples. This secular trend grew rapidly, resulting in a unified United Arab Republic in 1958, a development that was soon terminated by a coup in Syria.

Of course there were counter trends, reactionary trends in the Arab world that worked against the progressive, secular movement. Centered on the oil-driven dynasties, these forces, frightened by Arab nationalism, aligned themselves with the imperialists, and were vigorously anti-socialist. They offered an ideology counter posing rigid Islamic fundamentalism to secular nationalism. Of course their Western partners shared their hostility and were eager to exploit their influence and resources against Arab nationalism… To read the rest of the article, please go to: http://zzs-blg.blogspot.com/

Puerto Rican Independence Leader
Thanks Cuban Support of his People’s Cause

HAVANA, Cuba, Jun 23 (acn) Puerto Rican Independence leader Rafael Cancel Miranda thanked the Cuban people for their support of the efforts of Puerto Rico to shake off the colonial status imposed by the United States on the Caribbean island nation since 1898.

Cuba is presenting a draft resolution on the case of Puerto Rico at the UN Decolonization Committee in New York, which supports the right of Puerto Ricans to self-determination and independence.

“You have opened a door that will never close,” said Cancel Miranda during a phone conversation with Cuban television, and he stressed the support by Latin American nations of the Puerto Rican independence cause, particularly Venezuela, Ecuador and Bolivia.

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Sunday, June 22, 2014

ARGENTINA WANTS TO CONTINUE PAYING

ITS DEBTS BUT THEY WON’T LET IT

Argentina wants to continue paying its debts, just as it has been doing since 2005, but this is now hindered by Judge Thomas Griesa’s ruling and by the US Supreme Court’s refusal to take on the case

The default of the Argentine Republic in 2001 was the biggest one in the world’s financial history, largely exceeding 100 billion US dollars. Decades of overindebtedness and low growth left the country with a debt amounting to over 160% of its GDP, an unemployment rate close to 25% and over 50% of its population in poverty. Since 2003, several measures were implemented that were aimed at normalizing the country’s international financial relations. The fundamental principle of all negotiations conducted with creditors was always the same: in order to be able to pay, Argentina must first grow, so as to generate the resources that will enable it to honour its commitments. Growth to enable payments has been the hallmark of all debt negotiations conducted by Argentina since 2003. Under this approach, for over a decade, Argentina’s economy has been growing, bringing down unemployment and continuing to reduce its debt, to such an extent that foreign currency-denominated public debt owed to the private sector currently does not exceed 8% of the country’s Gross Domestic Product.

The process to restructure the debt that was defaulted on in 2001 still continues. Along this difficult road, the debt owed to the International Monetary Fund was repaid in full, an agreement was reached with creditors in connection with the final awards of the International Centre for Settlement of Investment Disputes (ICSID), obligations to international organizations like the Inter-American Development Bank, the World Bank and the Andean Development Corporation were also honoured in full and, recently, payment over a period of up to 7 years was agreed with the Paris Club, in addition to the compensation given to the company REPSOL, within the context of the retaking of control over 51% of the shares in oil company YPF.

Without doubt, the most complex problem was to reach a deal with the thousands of holders of debt in default since 2001, amounting to 81 billion US dollars. But Argentina was successful in this regard … it reached an agreement for a voluntary exchange of defaulted instruments for new bonds involving a haircut, longer term and lower rate, which ensured that the commitment undertaken by the country would be sustainable. The exchange offer was made in 2005 and again in 2010, finding acceptance among 92.4% of creditors. One of the keys to success was, as is customary in such transactions, the fact that both Argentinean legislation as well as the prospectus of the instruments issued prevent the offering of better conditions to creditors who failed to accept the offer (holdouts). Since 2003, through the efforts of all of the Argentine people, debt service payments related to the whole restructured debt have been made punctually, in an amount of over 190 billion dollars and with no access to international financial markets.

7% of bondholders did not accept the restructuring. The vulture funds that secured a ruling in their favour are not original lenders to Argentina. They purchased bonds in default at obscenely low prices for the sole purposes of engaging in litigation against Argentina and making an enormous profit. Paul Singer’s NML fund, for example, in 2008 paid only 48.7 million US dollars for bonds in default. Judge Griesa’s ruling now orders that it be paid an amount of 832 million U.S. dollars, i.e., a gain of 1,608% in only six years.

Argentina has appealed against New York District Court Thomas Griesa’s ruling, which orders payment of 1.5 billion dollars to be made on June 30, which is the due date of the next payment related to the restructured debt. However, it is estimated that the total bonds in default that did not enter the restructuring processes amount to 15 billion US dollars, i.e. over 50% of Argentina’s foreign currency reserves. Judge Griesa’s ruling would push the country to a new default. This is so because if Argentina does pay the 1.5 billion, it will have to pay 15 billion in the immediate future. To make matters worse, under the laws of Argentina and the clauses governing the restructured instruments (RUFO), if the vulture funds were to be paid, all other bondholders would demand equal treatment, involving an estimated cost of over 120 billion US dollars. If, on the other hand, Argentina does not pay the vulture funds, Judge Griesa’s ruling forbids Argentina to make payments to 92.4% of the bondholders who did accept the restructuring, as the judge has issued orders to the Bank of New York and to the settlement agencies for them not to pay.

In other words: paying the vulture funds is a path leading to default, and if they are not paid, Judge Griesa’s order entails jeopardizing the right of the bondholders to collect their debt restructured in 2005 and 2010.

Meanwhile, the vulture funds have invested millions of dollars in lobbying and propaganda, trying to make the whole world believe that Argentina does not pay its debts and refuses to negotiate. However, precisely since 2003, the way out of default while reducing debt was by negotiating and paying. Even today, Argentina still keeps the possibility of an exchange open for all those who respect the principle of equality. A decision of the U.S. Judiciary favourable to 1.6% of the bondholders, who are specialized in litigation, jeopardizes a debt restructuring voluntarily accepted by 92.4% of the creditors. The legal interpretations relied upon in Judge Griesa’s rulings have been called into question by the most varied parties: the governments of France, Mexico, Brazil and Uruguay; settlement agency Euroclear and the Fintech fund. Joseph Stiglitz, Anne Kruger, Nouriel Roubini have also made statements along the same lines, as well as CELAC, the G24, G77, and 106 British parliamentarians. Even the US government and the IMF have shown concern at the global implications of the ruling.

This ruling seeks to put Argentina in a delicate position, but also any other country that may have to undertake a restructuring of its debts in the future. Under the domestic legislation of any country, when there is a suspension of payments and 66% of creditors agree to a deal, the rest are also obliged to accept. As there is no legal framework governing the default of a sovereign country, this precedent means that even if 99.9% voluntary acceptance were to be achieved, 0.1% of creditors could invalidate the whole restructuring.

The will of Argentina is clear: we expect a judicial decision that promotes fair and balanced negotiating conditions to resolve this protracted and difficult dispute that has affected, affects and will continue to affect the Argentina people due to the voracity of a minute group of speculators.

– Presidency of the Nation –

– Argentine Republic –

Contact: Analia Rach Tel. +54 (11) 4114-9595

Email: privada@jefatura.gob.ar

The default of the Argentine Republic in 2001 was the biggest one in the world’s financial history, largely exceeding 100 billion US dollars. Decades of overindebtedness and low growth left the country with a debt amounting to over 160% of its GDP, an unemployment rate close to 25% and over 50% of its population in poverty. Since 2003, several measures were implemented that were aimed at normalizing the country’s international financial relations. The fundamental principle of all negotiations conducted with creditors was always the same: in order to be able to pay, Argentina must first grow, so as to generate the resources that will enable it to honour its commitments. Growth to enable payments has been the hallmark of all debt negotiations conducted by Argentina since 2003. Under this approach, for over a decade, Argentina’s economy has been growing, bringing down unemployment and continuing to reduce its debt, to such an extent that foreign currency-denominated public debt owed to the private sector currently does not exceed 8% of the country’s Gross Domestic Product.

The process to restructure the debt that was defaulted on in 2001 still continues. Along this difficult road, the debt owed to the International Monetary Fund was repaid in full, an agreement was reached with creditors in connection with the final awards of the International Centre for Settlement of Investment Disputes (ICSID), obligations to international organizations like the Inter-American Development Bank, the World Bank and the Andean Development Corporation were also honoured in full and, recently, payment over a period of up to 7 years was agreed with the Paris Club, in addition to the compensation given to the company REPSOL, within the context of the retaking of control over 51% of the shares in oil company YPF.

Without doubt, the most complex problem was to reach a deal with the thousands of holders of debt in default since 2001, amounting to 81 billion US dollars. But Argentina was successful in this regard … it reached an agreement for a voluntary exchange of defaulted instruments for new bonds involving a haircut, longer term and lower rate, which ensured that the commitment undertaken by the country would be sustainable. The exchange offer was made in 2005 and again in 2010, finding acceptance among 92.4% of creditors. One of the keys to success was, as is customary in such transactions, the fact that both Argentinean legislation as well as the prospectus of the instruments issued prevent the offering of better conditions to creditors who failed to accept the offer (holdouts). Since 2003, through the efforts of all of the Argentine people, debt service payments related to the whole restructured debt have been made punctually, in an amount of over 190 billion dollars and with no access to international financial markets.

7% of bondholders did not accept the restructuring. The vulture funds that secured a ruling in their favour are not original lenders to Argentina. They purchased bonds in default at obscenely low prices for the sole purposes of engaging in litigation against Argentina and making an enormous profit. Paul Singer’s NML fund, for example, in 2008 paid only 48.7 million US dollars for bonds in default. Judge Griesa’s ruling now orders that it be paid an amount of 832 million U.S. dollars, i.e., a gain of 1,608% in only six years.

Argentina has appealed against New York District Court Thomas Griesa’s ruling, which orders payment of 1.5 billion dollars to be made on June 30, which is the due date of the next payment related to the restructured debt. However, it is estimated that the total bonds in default that did not enter the restructuring processes amount to 15 billion US dollars, i.e. over 50% of Argentina’s foreign currency reserves. Judge Griesa’s ruling would push the country to a new default. This is so because if Argentina does pay the 1.5 billion, it will have to pay 15 billion in the immediate future. To make matters worse, under the laws of Argentina and the clauses governing the restructured instruments (RUFO), if the vulture funds were to be paid, all other bondholders would demand equal treatment, involving an estimated cost of over 120 billion US dollars. If, on the other hand, Argentina does not pay the vulture funds, Judge Griesa’s ruling forbids Argentina to make payments to 92.4% of the bondholders who did accept the restructuring, as the judge has issued orders to the Bank of New York and to the settlement agencies for them not to pay.

In other words: paying the vulture funds is a path leading to default, and if they are not paid, Judge Griesa’s order entails jeopardizing the right of the bondholders to collect their debt restructured in 2005 and 2010.

Meanwhile, the vulture funds have invested millions of dollars in lobbying and propaganda, trying to make the whole world believe that Argentina does not pay its debts and refuses to negotiate. However, precisely since 2003, the way out of default while reducing debt was by negotiating and paying. Even today, Argentina still keeps the possibility of an exchange open for all those who respect the principle of equality. A decision of the U.S. Judiciary favourable to 1.6% of the bondholders, who are specialized in litigation, jeopardizes a debt restructuring voluntarily accepted by 92.4% of the creditors. The legal interpretations relied upon in Judge Griesa’s rulings have been called into question by the most varied parties: the governments of France, Mexico, Brazil and Uruguay; settlement agency Euroclear and the Fintech fund. Joseph Stiglitz, Anne Kruger, Nouriel Roubini have also made statements along the same lines, as well as CELAC, the G24, G77, and 106 British parliamentarians. Even the US government and the IMF have shown concern at the global implications of the ruling.

This ruling seeks to put Argentina in a delicate position, but also any other country that may have to undertake a restructuring of its debts in the future. Under the domestic legislation of any country, when there is a suspension of payments and 66% of creditors agree to a deal, the rest are also obliged to accept. As there is no legal framework governing the default of a sovereign country, this precedent means that even if 99.9% voluntary acceptance were to be achieved, 0.1% of creditors could invalidate the whole restructuring.

The will of Argentina is clear: we expect a judicial decision that promotes fair and balanced negotiating conditions to resolve this protracted and difficult dispute that has affected, affects and will continue to affect the Argentina people due to the voracity of a minute group of speculators.

– Presidency of the Nation –

– Argentine Republic –

Contact: Analia Rach Tel. +54 (11) 4114-9595

Email: privada@jefatura.gob.ar

Minstry of Foreign Affairs. Esmeralda 1212, C.A.B. A C1007ABR, Argentine Republic.

Tel. +54(11)4819-7000 – info@cancilleria.gob.ar  – http://mrecic.gov.ar/