Gallagher interviewed on Argentina’s debt restructuring

Kevin gallagher, Professor of Global Development Policy and Director of the Global Development Policy Center at the Frederick S. Pardee School of Global Studies at Boston University, was interviewed by the Argentine news site Infobae on the restructuring of the country’s external debt.

Argentina’s biggest bondholders recently came up with a $ 65 billion debt restructuring proposal, which suggests a salvage value of around 55 cents on the dollar. The country’s leaders rejected the latest counter-proposal. Gallagher argued that the International Monetary Fund (IMF) should step in and rule over creditors while putting in clear preconditions if they are to help Argentina. He argues that the way Argentina ends up negotiating its debt could have ripple effects around the world as other countries face similar financial difficulties.

An extract:

Infobae: Besides the importance for Argentina, do you think that the result of this negotiation will have an impact on future restructuring, and in what aspects?

Gallagher: The whole world is watching Argentina. It is a microcosm of the looming global debt crisis. While Argentina negotiates, many countries around the world are facing growing debt problems. The G20 initiative (debt relief) has been reserved for smaller countries, which are even reluctant to participate because it can mean a drop in their credit rating. The private sector has not proposed any significant reform. So many countries are going to default and look horrified by Argentina and Ecuador.

The full interview can be read here.

Kevin gallagher is Professor of Global Development Policy at the Frederick S. Pardee School of Global Studies at Boston University, where he directs the Global Development Policy Center. He is the author or co-author of six books, the most recent of which, The Chinese Triangle: China’s Boom in Latin America and the Fate of the Washington Consensus. Learn more about him here.

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