Argentine Government found herself in position of bankruptcy – which means that admits inability to pay its debts.
This South American country declared bankruptcy for the second time in 13 years. Current debt of $ 1.3 billion came just as the previous one in 2001, when hedge funds bought government bonds at a reduced price.
Argentine officials to the last tried to sign a contract extension with the funds, but last night the last round of negotiations fail.
The U.S. court dealing with the dispute between the parties, issued a ruling pretrial settlement between the parties to be completed by Thursday morning 4:00 GMT.
Officially the Argentine authorities have not yet filed for bankruptcy. According to them, the court in the U.S. has taken unfair decision, that Argentina can not pay their debts to other creditors until it settles with hedge funds.
„The long-term consequences of the bankruptcy can not be predicted, but they definitely will not be positive,“ – said Daniel Pollack, a court-appointed mediator in the negotiations.
Experts predict that the effect of the current bankruptcy will not be as sharp as in 2001, when the government of Argentina had to freeze savings accounts of citizens.
In the streets were mass protests and clashes with the police, a result of which several people died.