All agree that if Argentina does go into default, it won't be because of an inability to pay. No other country has defaulted over such a low amount of debt relative to the size of its economy — just 2.2 percent of the GDP, according to analyst Ramiro Castineira with the Econometrica firm in Buenos Aires.
The total debt unpaid since Argentina's 2001 economic collapse is about $11.2 billion, and any U.S. precedent set in this case would apply to two-thirds of that, $6.2 billion. The rest is subject to jurisdictions outside the United States, Castineira said.
Still, Argentina seems to have run out of pain-free remedies. If the ruling is upheld, as expected, the Argentine government will need to pay out a total of nearly $5.5 billion in December alone. That is more than 10 percent of the total reserves for a country already struggling to pay salaries to public employees and maintain subsidies that have shored up vast sectors of the economy.
Fernandez and her ministers didn't offer any comments Monday on the case. But the president earlier this month said Argentina "won't pay debts at the cost of hunger and the exclusion of millions of Argentines, generating more poverty and social conflict so that the country explodes again."
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