In the aftermath of Argentina's semifinal World Cup win Wednesday, crowds broke into the usual victory chants, praising the homeland and poking fun at the British, their longtime nemesis in the Falkland Islands.
But a less traditional song could also be heard in the streets of Rosario, Argentina's third-biggest city and the birthplace of team captain Lionel Messi: a profanity-laced taunt of the hedge funds that have battled the government over defaulted debt since 2001.
The chants underscore how the country's decade-old legal battle with holdout creditors of Argentina's bonds is still capable of stirring up nationalistic passions.
The U.S. Supreme Court last month left intact a ruling by a lower federal court that may cause the nation to default again on July 30 unless it can reach a settlement with the funds, which are led by billionaire Paul Singer's Manhattan-based Elliott Management Corp. The investors rejected Argentine government exchange offers that imposed 70 percent losses after the country's default in December 2001 on $95 billion of its external debt. The investors sued for full repayment instead.
Argentines took to the streets after the national soccer team beat the Netherlands Wednesday, the anniversary of the nation's independence, in a penalty shootout after a scoreless game. The team will now seek its third World Cup title when it plays Germany Sunday in Rio de Janeiro.
President Cristina Fernandez de Kirchner, who has repeatedly referred to defaulted creditors as "vultures" she'd never repay, is coming to the negotiating table in a bid to avoid a debt debacle.
"Argentina is establishing a frank, open and transparent dialogue and promoting conditions for fair negotiation," cabinet chief Jorge Capitanich told reporters in Buenos Aires yesterday. "It can't accept extortion of any kind."
Elliott money manager Jay Newman wrote in an opinion piece in the Financial Times this week that the hedge fund is willing to accept bonds as a partial form of payment. Economy Ministry officials are scheduled to meet with a court-appointed mediator today in New York.