Gallagher Interviewed on Argentinian Debt Restructuring
Kevin Gallagher, Professor of Global Development Policy and Director of the Global Development Policy Center at the Frederick S. Pardee School of Global Studies at Boston University, was interviewed by Argentinian news website Infobae on the restructuring of the country’s foreign debt.
Argentina’s biggest bondholders recently offered a proposal to restructure $65 billion in debt, which suggests a recovery value of approximately 55 cents on the dollar. The country’s leadership has rejected the latest counter-proposal. Gallagher has argued that the International Monetary Fund’s (IMF) should step in and reign in the creditors while also putting clear preconditions in place if they are to assist Argentina. He argues that the way Argentina ends up negotiating its debt could have ripple effects across the globe as other countries face similar financial struggle.
An excerpt:
Infobae: In addition to the importance for Argentina, do you think that the result of this negotiation will have any impact on future restructuring, and in what aspects?
Gallagher: The whole world is looking at Argentina. It is a microcosm of the looming global debt crisis. While Argentina negotiates, many countries in the world face increasing debt problems. The G20 (debt relief) initiative has been only for the smaller countries, which are even reluctant to participate because that may mean lowering their credit ratings. The private sector has not offered any significant reform. So, many countries are going to default and are looking horrified at Argentina and Ecuador.
The full interview can be read here.
Kevin Gallagher is a professor of global development policy at Boston University’s Frederick S. Pardee School of Global Studies, where he directs the Global Development Policy Center. He is author or co-author of six books, including most recently, The China Triangle: Latin America’s China Boom and the Fate of the Washington Consensus. Read more about him here.