Source:
www.breakingviews.com
is Europe's leading financial commentary service
Want to know how not to run a massive debt restructuring? Then just look at Argentina. For almost two years after the country defaulted, it did nothing to restructure its $100 billion of debts. Then it tried to bully its creditors into accepting a mean settlement. Investor confidence collapsed. Several creditors have taken to the courts to confiscate Argentine assets held abroad.
This has the makings of a vicious circle. Unless it is broken soon, perhaps by the three investment banks Argentina has just hired to advise it on a settlement, the restructuring will collapse into chaos. Then Argentina will offer the ghastly precedent of how not to mend fences with international creditors.
How might the cycle be broken? Everyone agrees that Argentina needs to write off some of its debt. Yet it is also clear the country will have...
