Porzecanski, Arturo C. (2012): Buenos Aires to Athens: The Road to Perdition. Forthcoming in:
Download (417kB) | Preview
Three sovereign defaults in the past decade have each inflicted losses of at least 70% on bondholders: Argentina, Ecuador, and now Greece. In each case, creditor rights and the rule of law were trampled, setting troubling precedents that are worrying investors involved in vulnerable European countries. In Argentina (in default since 2002), numerous arbitrary measures were taken that damaged the interests of investors; the debt relief that was demanded bore little relation to the country's capacity to pay; and court judgments and arbitral awards against the sovereign have been routinely ignored. Ecuador (2008-2009) stands as the clearest example of sovereign unwillingness to pay. Investors were blindsided, bullied, and then sacrificed as part of a personal and ideological vendetta on President Correa's part. Investor confidence in Greece was destroyed by persistently negative attitudes coming out of Berlin. The huge losses imposed on creditors were based on questionable estimates and judgments, and various troubling, expedient means were used to achieve the dubious ends. Chances are that the road to perdition for investors will soon be extended to some other capital in Europe.
|Item Type:||MPRA Paper|
|Original Title:||Buenos Aires to Athens: The Road to Perdition|
|Keywords:||Argentina; Ecuador; Greece; Debt; Default; Restructuring; Crisis|
|Subjects:||F - International Economics > F3 - International Finance > F34 - International Lending and Debt Problems
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics
|Depositing User:||Arturo C. Porzecanski|
|Date Deposited:||07. Apr 2012 12:36|
|Last Modified:||18. Feb 2013 11:08|
Juan J. Cruces and Christoph Trebesch, “Sovereign Defaults: The Price of Haircuts,” CESIFO Working Paper #3604, October 2011.
Arturo C. Porzecanski, "From Rogue Creditors to Rogue Debtors: Implications of Argentina's Default," Chicago Journal of International Law, Summer 2005.
Eric David Kasenetz, "Desperate Times Call for Desperate Measures: The Aftermath of Argentina's State of Necessity and the Current Fight in the ICSID," George Washington International Law Review 3 (2010).
Arturo C. Porzecanski, "Should Argentina be Welcomed Back by Investors?," World Economics, September–December 2011.
Arturo C. Porzecanski, "When Bad Things Happen to Good Sovereign Debt Contracts: The Case of Ecuador," Law & Contemporary Problems, Fall 2010.
Lee C. Buchheit and G. Mitu Gulati, "The Coroner's Inquest," International Financial Law Review, September 2008.
Kevin P. Gallagher, Amos Irwin, and Katherine Koleski, "The New Banks in Town: Chinese Finance in Latin America," Inter-American Dialogue, March 2012.
Matthias Matthijs and Mark Blyth, "Why Only Germany Can Fix the Euro," Foreign Affairs Snapshots, November 17, 2011.
Charles Wyplosz, "Debt Sustainability Assessment: Mission Impossible," Review of Economics and Institutions, Fall 2010.