And... That's A Wrap. (Maybe?)

"Put simply, President Macri's election changed everything." So sayeth Judge Griesa, according to Bloomberg, which reports that he will lift the injunction once Argentina repeals laws blocking payment on defaulted debt. Changing "everything," apparently, does not include actually treating creditors equally. But equal treatment is so very 2012. And we're beyond that now, aren't we?

Lifting the injunction doesn't, of course, make the claims asserted by NML et al. go away.* But it will dramatically reduce their leverage, presumably producing a settlement on or near the terms most recently offered by Argentina. And if there isn't a particularly good reason to lift the injunction--one rejected settlement offer is hardly my definition of "everything"--there was never a particularly good reason to enter it in the first place. All's well that ends well, I suppose.

[Edit: Because the injunctions are on appeal, the appeals will have to be remanded back to the district court before the order lifting the injunctions take effect.] 

Comments

[Maria Esperanza Casullo]

Hi. I am Maria E. Casullo, a political scientist from Argentina and Georgetown Graduate. I want to thank Credit Slips for the excellent coverage of the ... saga, shall we say. I have one question and one comment.

1. Comment first. I do not think it is "a wrap", or it might be, but not just yet. President Macri's party does not have a majority in Congress so the repeal of the so call "padlock" law is not automatic. I think he is going to get the votes but it will take some time and some finagling and pork-tossing to get it done. He is going to have to put up for the votes of the opposition representatives. Again, I think he will get the votes because everyone is sick and tires of this issue ... the question is when. In fact, here in Argentina the press is not treating the news as such a big victory, yet.

2. After all this is said and done (lets say in one month at top speed), how long after that is the injunction lifted?

Thanks so much, we have been reading you guys for over a year.

M E Casullo

[Mark Weidemaier]

Maria: Thanks very much for the comment and insight about the politics of lifting the bar on payments. The timing will depend on the Court of Appeals. Technically, Judge Griesa doesn't have jurisdiction to vacate the injunctions, because they are on appeal. But his intent to lift them may encourage the Court of Appeals to remand those cases without deciding them, in which case he could lift the injunction immediately after the conditions he imposed (including the removal of the legislative ban on payments) are satisfied.

In any event, remand could happen very quickly, although the relevant procedural rule (12.1 of the Federal Rules of Appellate Procedure) has no deadline and doesn't require the Court of Appeals to do anything.

[AngryAnalyst]

I don't know if your take on this is totally fair. Uniquely recalcitrant sovereign could be "argle-bargle" to borrow a phrase from a recently departed eminent jurist or it could actually be a key part of a ruling. Argentina is no longer uniquely recalcitrant, that is a change and perhaps it was part of the logic granting the injunction?

You are correct that the pari passu basis of the injunction would be violated by the proposed settlement. I'm not sure that is the entire reason for the injunction to have existed though, which your responses seem to pre-suppose.

[Jazi Zilber]

What Griesa said is that the only reason he did the pari passu thing that because Argentina was extraordinarily stubborn. Now that they act reasonably, there is no reason to keep the harsh and unreasonable measure.

It fits with some reports saying that for a long time Griesa was less harsh with Argentina, and he only got tough after they kept being hard to handle.

[Maria Esperanza Casullo]

Thanks!!