Argentina's recent default was the work of one man: US federal judge Thomas
Griesa, who prohibited the country from repaying its creditors until it repaid
in full the 7% who refused a restructuring deal. Ultimately, however, it may be
America that pays the steepest price.
The US Supreme Court has barred Argentina from making payments to fulfill
debt-restructuring agreements with its creditors unless the 7% of creditors who
rejected the agreements are paid in full. While it is hard to cry for Argentina,
the ruling sets back the evolution of the international regime for restructuring
The country has already managed to defy other institutions critical to the world financial order, including the World Bank and U.S. courts. It is hard to believe, especially without the participation of the IMF, that the Paris Club deal closes the books on Argentina's debt to other countries.