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UN General Assembly Votes to Negotiate Sovereign Debt Restructuring

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Reacting to Argentina's battle about its past debts with what it calls predatory hedge funds, the UN General Assembly on Tuesday approved a resolution by 124 votes to 11, with 41 abstaining, which "decides to elaborate and adopt through a process of intergovernmental negotiations, as a matter of priority during its sixty-ninth session, a multilateral legal framework for sovereign debt restructuring processes."

UNITED NATIONS, September 10 (RIA Novosti) - Reacting to Argentina's battle about its past debts with what it calls predatory hedge funds, the UN General Assembly on Tuesday approved a resolution by 124 votes to 11, with 41 abstaining, which "decides to elaborate and adopt through a process of intergovernmental negotiations, as a matter of priority during its sixty-ninth session, a multilateral legal framework for sovereign debt restructuring processes."

The United States voted against the resolution, sponsored by the Group of 77 and China, saying that it would introduce uncertainty into financial markets.

Argentina's foreign minister Hector Timerman said, after the vote, that “the time has come to give a legal framework to the financial system for restructuring sovereign debt that respects the majority of creditors and which allows countries to come out of crises in a sustainable manner.”

The resolution adopted Tuesday cites “the work carried out by the International Monetary Fund in 2003, with the support of the International Monetary and Financial Committee, to formulate a proposal for a sovereign debt restructuring mechanism.”

The framework's goal, the resolution adopted Tuesday says, is “increasing the efficiency, stability and predictability of the international financial system and achieving sustained, inclusive and equitable economic growth and sustainable development, in accordance with national circumstances and priorities.”

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