The Jubilee Blog

Argentina Debt Payments Blocked by US Court

The Argentine government announced Thursday that it transferred funds to the Bank of New York Mellon to pay the 92% of bond holders who restructured after Argentina's 2001 default. Reuters reports that Judge Thomas Griesa blocked the restructured debt payments until a settlement is reached on $1.65 billion that Griesa ordered be paid to hold-out creditors. 

"We are in the middle of a ping pong match between Argentina and the hold-outs," stated Eric LeCompte, Executive Director of the religious debt relief group, Jubilee USA Network. "Unfortunately, as this battle continues in the courts, Argentina faces another default." 

At a Time of Inter-Faith Conflict: A Call for Unity

by Erin Kelso 

Inter-faith conflict is not a topic that comes up very often in the United States. Other issues tend to weigh more heavily on our minds and hearts. A new study by the Pew Research Center, however, indicates that this is the exception, not the norm. The 2014 report reveals that, “Religious hostilities increased in every major region of the world except the Americas.”

Thirty-three percent of surveyed countries reported high levels of religiously motivated violence. Places with the highest recurring religious tension include Israel, Somalia, India, Afghanistan and Pakistan. Christians suffered hostility in 110 countries while Muslims experienced the same in 109. Europe showed the greatest increase in religious tension surrounding issues like wearing religious attire in public.

Clearly the conflict between groups goes far beyond differences in doctrine. We can't stop the religiously motivated violence that is a tragic and deeply-rooted part of our world today. But we can change our perspective, and make the choice to focus on that which unites, rather than divides us.

At the World Cup of Debt, the World Lost

by Andrew Hanauer

For Argentina, so far so good at the World Cup in Brazil.

At the Supreme Court in Washington, however, Argentina suffered a catastrophic defeat that no soccer metaphor can accurately capture.

On Monday, the Supreme Court announced it would not hear Argentina’s appeal of a lower court ruling in favor of a group of hedge funds suing the country for more than $1 billion.

The dispute is rooted in Argentina’s 2001 debt default. When the country defaulted, amidst economic and political turmoil, nearly 93% of its creditors accepted a deal and took less money than they were owed. But a small group held out. The hold outs included hedge funds that have been nicknamed “vulture funds.” The nickname derives from the funds’ strategy of buying up the debt of economically distressed countries for pennies on the dollar and then suing, targeting debt relief money for collection. That money, of course, is often earmarked for social services like AIDS prevention and school construction.  

The court’s decision is a huge blow for Argentina, but it’s also a huge blow to the rest of the world. Here’s why.

Supreme Court Rejects Argentina Debt Appeal

 

By Anya Lewis-Meeks

The US Supreme Court denied Argentina's appeal for a hearing today, leaving intact a lower court ruling that validates predatory behavior targeted towards countries in financial distress. The high court also denied a related appeal on behalf of the more than 92% of bond holders who had accepted Argentina's restructuring deal. In a final blow, the court also decided that hedge funds can access information on where Argentina holds financial assets around the world. The International Monetary Fund (IMF), legitimate Wall Street investors and the US government had sided with Argentina because of the case's impact on debt restructuring, poor country access to credit and global financial stability. 

"I am absolutely shocked by the decision," said Eric LeCompte, Executive Director of the religious anti-poverty organization, Jubilee USA Network. "For heavily indebted countries supporting poor people, this is a devastating blow. These hedge funds are equipped with an instrument that forces struggling economies into submission."

While National Team Prepares to Face Bosnia, Government Fights Hedge Funds at US Supreme Court

by Andrew Hanauer

While Argentina prepares to face Bosnia Sunday in the first round of the World Cup, the South American soccer power faces a second major contest in a very different venue. The United States Supreme Court will announce in June if it will hear Argentina vs NML Capital that impacts the operation of the global financial system. The Financial Times has called the case the "Debt Trial of the Century."

"If Argentina loses at the Supreme Court, not even the great Lionel Messi will be able to reverse the damage," said Eric LeCompte, Executive Director of Jubilee USA, a religious anti-poverty organization. "The stakes are high in this World Cup of debt and Argentina fans are watching the US Supreme Court as much as they are watching Brazil."

The case dates back to Argentina's 2001 default. While nearly 93% of the country's creditors agreed to a deal with Argentina to restructure its debts, a small group of hold-outs refused the deal and sued. This group included hedge funds that specialize in purchasing the distressed debt of impoverished countries and then suing to claim assets freed up to support poor populations through debt relief. Because these funds purchase debt for pennies on the dollar and then litigate to collect when a country is making a recovery or has assets from debt relief earmarked for the poor, these hedge funds are popularly referred to as "vulture funds." 

"Argentina has a much bigger problem than anything it will face in Group F," added LeCompte, who works on four United Nations expert panels on debt and human rights. "These predatory hedge funds threaten to throw Argentina into default." 

IMF Reviews International Financial Crises Solutions

by Merry Pham

Behind closed doors, International Monetary Fund (IMF) Executive Board Members are reacting to solutions prepared by IMF staff aimed at preventing global and regional financial crises. Part of the focus stems from G20 concern over extreme predatory behavior on global finance and the precedent set in the related pending Supreme Court case of Argentina vs NML Capital.

“We understand that in initial conversations, solutions are sought to limit or eliminate extreme predatory and hold-out behavior that violate global debt relief policies, debt restructuring and sound operation of the financial system,” stated a letter sent to IMF officials from Jubilee USA Network and New Rules for Global Finance. “We welcome your efforts on these extreme issues and your further discussions of supporting solutions to international financial crises."

Last year the G20 asked the IMF to address the global debt crisis and speculative investment, which spurred the global financial crisis of 2008. The IMF’s major annual report this spring focused on inequality and explains how debt and debt related restructuring processes propel inequality and financial crisis.

Supreme Court Justices Consider Hearing Argentina Hedge Fund Debt Case

Washington DC - US Supreme Court justices will decide next steps in the Argentina vs NML Capital debt case today. The case dates back to 2001 when Argentina defaulted on its debts and a group of predatory hedge funds purchased some debt for pennies on the dollar. The hedge fund NML Capital leads a group of hold-out creditors in suing the country for more than $1 billion. The case will set a precedent that will impact the functioning of the global financial system. Supreme Court justices will decide to formally hear the case or ask the US Justice Department to issue an opinion.

"It's most likely that the justices will ask the opinion of the US Solicitor General," noted Eric LeCompte, Executive Director of Jubilee USA and a member of United Nations expert groups focusing on this case. "Asking the opinion of the US government is good news for Argentina as the Justice Department has continually stood on the side of Argentina in this case."

Argentina's Debt Deal with the Paris Club - Another Perspective

by Andrew Hanauer

Argentina's recent debt deal with the Paris Club has elicited different responses from groups involved in conversations regarding debt and financial reform. Jubilee USA expressed its views in the wake of the agreement, but we also discussed the situation with our partners around the world and heard a range of perspectives. We are grateful that Latindadd, a regional Jubilee coalition in Latin America, granted us permission to share their views on the deal. Those views are posted below.

Jubilee: From the Caribbean to the Vatican

By Merry Pham

Photo: Jubilee delegation with Cardinal Turkson in the Vatican

It's been a busy Spring at Jubilee USA. From the Supreme Court to the Caribbean to the Vatican, Jubilee USA has been working to move forward critical financial reforms to end global poverty. Our Executive Director, Eric LeCompte, touches on our current campaigns and some of the biggest issues facing global poverty today in an interview with Catholic News Service.

 

Jubilee campaign for debt relief gains momentum, allies in the Vatican

BY DENNIS SADOWSKI 
Catholic News Service

WASHINGTON (CNS) — A Washington-based organization and its worldwide partners working to carry on the biblical principle of jubilee have gained the attention of the Vatican.

Representatives of Jubilee USA Network and its partners discussed the need for debt relief for poor countries and international financial reform for 90 minutes May 21 in the Apostolic Palace with Cardinal Pietro Parolin, Vatican secretary of state, and Cardinal Peter Turkson, president of the Pontifical Council for Justice and Peace.

Eric LeCompte, Jubilee USA’s executive director, and others, including Father Sean Doggett of the Diocese of St. George’s in Grenada, also explained their work during a brief audience with Pope Francis.

Read the full article.

Jubilee Welcomes Three New Congregations!

Epworth Methodist Church in Berkeley, CA is one of three
new Jubilee Congregations this week

By Merry Pham

This week, Community Presbyterian Church of Pittsburg (PCUSA), First Congregational Church of Antioch (UCC) and Epworth United Methodist Church join us as Jubilee Congregations (JCs). As JCs, the churches impart a moral presence and voice to Jubilee’s work. For the churches, this partnership can serve as a means to mobilizing faith in a practical and concrete way.

The Jubilee Congregations program has been at the heart of Jubilee's work for more than a decade. The Jubilee movement has always been an example of what people of faith can do together. Our work speaks to shared values that cross political and religious lines; the ability of Jubilee to foster unity was evidenced again this year when we held an event co-hosted by student groups representing three major faiths and both major political parties.

Jubilee is grateful for the support of congregations and faith communities across the country. We welcome the involvement of these three new communities and look forward to working with them in the shared vision of building a global economy that serves the most vulnerable.

For more information on Jubilee Congregations, please see our website.