Law \ Legal

Country That Needlessly Defaulted Eight Years Ago To Avoid Paying More On Its Debt Denies It Would Do Something So Irrational As Understate Its GDP To Avoid Paying More On Its Debt

Argentina hasn’t had a hell of a lot of luck in American courts making its case as to why it shouldn’t have to make certain debt payments. And so the uniquely recalcitrant debtor certainly hopes that British judges are of a more flexible cast of mind when deciding what is and isn’t a reasonable way to calculate a country’s gross domestic product for the purposes of determining payments on GDP-linked bonds.

The question, as in the U.S. case, was raised by—who else?—a group of hedge funds who’ve all but cornered the market on the euro-linked securities in question. And that question is, when Argentina decided to change the way it calculated its GDP back in 2013, shouldn’t it have also changed the GDP base upon which those bonds were based?

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