On Thursday, the Argentine Senate passed a bill to allow the country to pay its debt in Buenos Aires and Paris instead of New York, after New York judge Thomas Griesa banned Argentina from servicing restructured debt in until it pays the vulture funds US$1,330 million dollars plus interest.
Mexican David Martinez Guzman, who has nearly US$1 billion dollars in Argentine debt bonds, said that he will accept the country's new law to receive the payment. “It is a correct measure that a sovereign country must make before a judicial attack,” Martinez explained.
Tulio Zembo, representative of small Italian bondholders also approved of the new Argentinean law. “This might be the correct decision and a possible solution,” he said.
Over the last few months, Argentina’s President Cristina Fernández negotiated this proposal with the Group of 77, formed by 130 developing countries plus China.
The proposal will set an international procedure to restructure and smooth a country’s debt, instead of leaving it to a single international bank. The proposal is likely to be voted on at United Nations general assembly meeting on September 16.
Sarah-Jayne Clifton, Director of Jubilee Debt Campaign, stated on the organization's web page, “This is a welcome move that developing countries are collectively calling for fairer ways of dealing with international debts. Countries across the world would benefit from the existence of a fair, independent and transparent way to arbitrate on debts when governments cannot.”
According to Argentinean newspaper Ámbito Financiero, on Wednesday China's Commissioner for Development and Reform, Xu Shaoshi, also gave his support for Argentina's proposal, "Whatever happens in the world, it wont change our decision of collaborating and working with Argentina, since we have a strategic partnership."
Other countries such as United States, Japan, Australia, and France, have rejected Argentina's proposal, stating that the UN is not the place for discussing technical or financial strategies.