Argentina Debt Battle Heads for 'Showdown,' as Obama Rejects Jurisdiction of the International Court of Justice
August 9, 2014 • 9:31PM

In a very brief statement Aug. 8, a State Department spokesperson announced that the Obama administration has rejected the jurisdiction of the International Court of Justice (ICJ) at The Hague, in the case brought against it Aug. 7 by the Argentine government.

"We do not view the ICJ as the appropriate venue for addressing Argentina's debt issues, and we continue to urge Argentina to engage with its creditors to resolve remaining issues with bondholders," the statement read—in effect arguing that the vulture funds that speculated on Argentina's defaulted debt to make an obscene profit are legitimate creditors. Argentina's suit at the ICJ argued that because the Obama administration is responsible for the actions of its own judiciary, it is guilty of violating its "international obligation to respect the sovereignty of the Argentine Republic, particularly its sovereign immunity," in the legal case being played out in the court of New York Federal Judge Thomas Griesa.

Griesa is demanding that Argentina pay the vulture predators the full face value of defaulted bonds they bought for a song in 2008, and is holding hostage $539 million Argentina deposited in its trustee bank (Bank of New York) to pay its restructured bondholders, unless the Fernandez de Kirchner government capitulates and agrees to pay the vultures at the same time.

Argentina has no intention of doing so.

Hence, "this is going for a total showdown," statesman Lyndon LaRouche commented today. "It's clear Argentina isn't going to back down on this." Indeed. The Argentine government continues to label the vultures' actions "extortion," and demands that the Obama administration intervene to "restrain" the rogue, out-of-control Griesa. In its presentation to the ICJ, Argentina asserted that "the United States has the obligation to cease its illicit behavior, and to redress all of the damages caused to Argentina, by virtue of general international law." It states that the rulings of the U.S. judiciary—Griesa's court—have been carried out in an "abusive" manner, "exceeding its jurisdiction and competence, contrary to international law," and violating the rights of bondholders in the 2005 and 2010 restructuring.